.png)
Fixed Mortgage Rates Back to as Low as 3.69%!
- Paul Meredith
- Aug 27
- 4 min read
Given all the fixed mortgage rate increases we’ve seen since bond yields began their upward climb back in April, I’m happy to bring some great news! A major lender has introduced a new 3-year fixed rate promo at 3.69%. However, there are two conditions that need to be met to qualify for the promo rate.The first is that the mortgage needs to be insured. In other words, you’re purchasing with less than 20% down payment and therefore requiring CMHC default insurance. In some situations, it can also apply to insured mortgages that are up for renewal.The second condition is the mortgage needs to close within 30 days. That said, it may be possible to secure the same rate with slightly longer lead times, however, it would be considered on a case-by-case basis.If you have 20% or more down, or an uninsured mortgage approaching renewal, the lowest 3 year fixed is currently 3.99% under the same promo with a 30 day close. We have been getting similar rates for clients with longer closings as well, but it cannot be guaranteed. What I can guarantee is that we will fight to get your rate as low as possible, and we will monitor it right up to funding so we can grab any drop for you. Coffee fuels us. So does saving you money.
The Lowest Mortgage Rates for 5 Year Fixed and Variable
While there are no specific 5-year promotions, insured purchases can still reach as low as 3.94% on a 5-year fixed. The lowest insured 5 year variable options are in the range of prime minus 1.00% to prime -0.90% (currently 3.95% to 4.05%).
For uninsured mortgages, most 5-year fixed options fall between 4.04% and 4.19%, while the lowest variable rates are landing between prime minus 0.85% and prime minus 0.65% (currently 4.10% to 4.30%), depending on your situation.
Does it Make Sense to Put Less Money Down to Secure the Lower Rate?
There are some who become so focused on getting the lowest rate that they forget about what’s most important: a mortgage with the lowest cost. While it’s great to get a lower rate, the hefty insurance premium will far exceed the savings seen from the lower rate, making the insured option an expensive choice. In fact, the rate difference on a 5-year term would need to be roughly 0.65% on the insured option… and that’s just to break even. On a 3 year term, the difference would need to exceed 1.00%. You can read more about this in my blog: Should You Pay for CMHC Insurance to Lower Your Mortgage Rate.
Mortgage Rates are Not Dropping
While the 3.69% insured promo is close to the three-year lows we enjoyed back in April, it does not mean that fixed rates are dropping across the board. It’s just an aggressive promo offered by one lender.
The Government of Canada 5-year bond yield has been relatively flat for the month of August. It closed at 2.942 on July 31st and is currently sitting at 2.966 as of noon on Wednesday, August 27th. As long as the bond yields are flat… fixed mortgage rates will remain stable.
What’s Next from the Bank of Canada?
There are three scheduled announcements remaining in 2025:
September 17th
October 29th
December 10th
While further cuts from the Bank of Canada are expected, market odds of a rate cut on September 17th are sitting at only 34% as of yesterday… despite the promising inflation report for July. This number can fluctuate daily and there still two key events that can change the game leading up to the September 17th announcement. The next jobs report is coming on September 5th, followed by another inflation report on September 16th. But as of now, it’s looking like another pause from the Bank of Canada in September.
Final Thoughts
Bond yields fluctuate by the second, much like stocks. This means that fixed mortgage rates have no set dates for changes and can change in either direction at any time… sometimes without warning. Fixed rates will not change perfectly in line with the bond yield. There are times when yields can rise or fall with no changes to fixed rates. It generally takes large swings to move the needle, but even then, bond yields are a signal, not a guarantee that rates will move. However, large movements in bond yields are generally clear indicators that changes to fixed mortgage rates are coming.
The new fixed rate promotions are currently the lowest mortgage rates in the industry. While there is no set time for the promotion to end, the lender could pull it at any time. Even if your closing or renewal date is outside of the 30-day window, we still may be able to get these rates for you… or at least come close. If you have a mortgage renewal or purchase closing within the next 120 days, reach out to us today to secure the lowest rates available for your specific situation.
Other recommended blogs:
Comments