Canadian Mortgage Rates July 2026: What Homeowners and Buyers Need to Know
If you have a mortgage or are planning to buy a home, here is the key takeaway: The lowest mortgage rates in Canada are now around 3.9% for fixed and 3.4% for variable, but major banks are charging much more — between 4.62% and 6.09% for a five-year fixed term. This means shopping around could save you thousands of dollars a year.
What is happening with mortgage rates?
As of July 2026, according to NerdWallet Canada, the best available rates are:
- Lowest fixed rate: Around 3.9%
- Lowest variable rate: Around 3.4%
However, if you go directly to a big bank like RBC, TD, or BMO, you will see much higher rates:
- Five-year fixed at major banks: 4.62% to 6.09%
Fixed rates have edged down slightly recently. This is because bond market movements improved and there is hope the Iran war might end soon. Variable rates have stayed stable because the Bank of Canada held its overnight rate at 2.25% in June.
What could change next?
The article warns that two big factors could move rates:
- If the Iran war escalates: Oil prices and inflation could rise. This might force the Bank of Canada to hike rates, making variable mortgages more expensive.
- If the war ends peacefully: Fixed rates could drop further.
Who is affected?
- Homeowners renewing soon: You may face higher payments compared to your previous low rate.
- Home buyers: Affordability depends on getting the best rate possible.
- Variable-rate mortgage holders: You are at risk if the Bank of Canada raises rates later this summer.
- Anyone refinancing: Higher rates mean higher monthly costs.
What you should do
- Shop around for the best rate. Do not just go to your current bank. Use a mortgage broker — they often have access to lower rates than big banks.
- Compare offers carefully. Look at the interest rate, but also check fees, prepayment penalties, and your credit score requirements.
- If you have a variable-rate mortgage: Prepare for possible rate increases. Consider whether you can afford higher payments if the Bank of Canada hikes rates.
- If you are renewing soon: Think about locking in a fixed rate if you want stability. But watch for potential drops if the geopolitical situation improves.
- Check your credit score. A better score can help you qualify for lower rates.
Bottom line
Mortgage rates in Canada are lower than last year, but big banks still charge much more than the best available rates. Fixed rates could drop further if the Iran war ends, but variable rates could rise if the war escalates. Your best move is to shop around, use a broker, and compare offers before committing. Do not assume your current bank has the best deal.
Source: NerdWallet Canada