Historical mortgage rates: Averages and trends from the 1970s to 2024

This article is updated from a previous version. 

From ultra-high rates in the early 1980s to the record lows Canada saw in 2021, mortgage interest rates are always changing.

The Bank of Canada sets the country’s overnight lending rate, which is used as a benchmark by banks and other lenders when setting the prime rates they offer customers on variable-rate products, like a variable mortgage, for instance.

Meanwhile, fixed mortgage rates are linked to the Government of Canada’s bond market. Government bonds are considered a safe and reliable investment, and banks use returns on their bond investments (called bond yields) to cover any losses from their mortgage business. Fixed mortgage rates are priced based on bond yields, plus a spread. The spread is usually 1-2% but can widen or shrink based on the state of the economy, inflation, and the demand for bonds.

Historically, the five-year fixed-rate mortgage has been the most popular type in Canada. However, in light of higher interest rates, this mortgage type now accounts for less than 15% of new mortgages, according to the most recent Residential Mortgage Industry report released by the Canadian Mortgage and Housing Corporation (CMHC). 

We dug into historical Canadian mortgage rate data from both the Bank of Canada (BoC) and the LowestRates.ca mortgage quoter to follow the roller coaster ride that this popular mortgage type has taken over the years.

What you’ll see below are graphs and tables for five-year fixed-rate conventional mortgages (meaning the down payment on the home is at least 20% of the purchase price).

Bank of Canada historical mortgage rates: 1975 – 2020 

The following mortgage rate history chart is from the Bank of Canada, dating back to 1975. The central bank sources its data from the weekly posted interest rates from Canada’s Big Six banks: Bank of Nova Scotia (Scotiabank), Toronto-Dominion Bank (TD), Bank of Montreal (BMO), Royal Bank of Canada (RBC), Canadian Imperial Bank of Commerce (CIBC), and the National Bank of Canada.

Here’s how the conventional five-year fixed mortgage rates have looked throughout the last 50 years:

Source: Bank of Canada

Interest rates don’t exist in a vacuum, and are a reflection of the state of moving parts in Canada’s economy and abroad, including a wide number of economic growth indicators and global geopolitical risks. 

For example, interest rates for conventional five-year, fixed-rate mortgages peaked in 1981 when the BoC raised its benchmark overnight lending rate to 21% amidst the global recession of the early 1980s. The recession followed a chain of events, including the Iranian Revolution, which resulted in a drop in oil production. As oil prices shot up, so did inflation in Canada and other G7 countries.

Conventional five-year fixed rates have generally trended downward since then, with little spikes here and there as the BoC raised its policy interest rate when needed — for example, to curb inflation during the early 1990s, and as a stopgap against a steep decline in the value of the Canadian dollar in 1995. Following the onset of the Great Recession in 2007, interest rates have continued a downward trend and are now sitting at record lows. 

Interest rates don’t exist in a vacuum. Instead, they reflect the state of moving parts in Canada’s economy and abroad, including a wide number of economic growth indicators and global geopolitical risks. 

For example, interest rates for conventional five-year, fixed-rate mortgages peaked in 1981 when the BoC raised its benchmark overnight lending rate to 21% amidst the global recession of the early 1980s.

The recession followed a chain of events, including the Iranian Revolution, which resulted in a drop in oil production. As oil prices shot up, so did inflation in Canada and other G7 countries.

Conventional five-year fixed rates have generally trended downward since then, with little spikes here and there as the BoC raised its policy interest rate when needed — for example, to curb inflation during the early 1990s, and as a stopgap against a steep decline in the value of the Canadian dollar in 1995.

Following the onset of the Great Recession in 2007, interest rates continued a downward trend. And finally, during the height of the pandemic in 2020, the BoC lowered interest rates further to stimulate the economy. Around that time, rates bottomed out at the 1s.

By 2022, the economy began to rebound, leading inflation to balloon. To reel in that inflation, the BoC began a series of rate hikes beginning in March 2022, though inflation would still hit a peak of 8.1% in June (typically, the Bank targets 2% inflation).

The overnight rate now sits at 5% - nowhere near as high as they were in the ‘90s, but testing the limits of affordability in Canada like never before.

Related: How much of a down payment do you need to buy a home in Canada?

LowestRates.ca historical mortgage rates (2020 – present)

The Bank of Canada has extensive historical mortgage data, but big banks’ posted mortgage rates don’t tell the entire story of what’s available to consumers.

Brokers are licensed professionals who shop the market for you and can present you with a selection of mortgage rates from different lenders. Brokers don’t provide the mortgage itself — your mortgage will ultimately come from and be serviced by some type of financial institution.

However, brokers use their large volume of business to negotiate lower interest rates from lenders and pass those savings on to homebuyers. Canada’s big banks hold the majority market share of outstanding mortgage balances. 

Learn more: Should I get a mortgage from a broker or a bank?

You can go directly to a bank or a lender to see what they offer, but a rate comparison website like LowestRates.ca allows you to compare mortgage rates from a variety of lenders and brokers across Canada, all in one place. 

Below is a table of historical mortgage rates in Canada, based on average conventional five-year fixed mortgage rate data from LowestRates.ca, dating from February 2022, just before the first rate hike.  

Amidst predictions of rate cuts in the near future, average five-year, fixed mortgage rates have taken a back seat to shorter terms of two or three years. That way, buyers can still take advantage of the comparatively lower mortgage rates (variable rates currently sit in the mid-6s) without being locked into the top of the rate trend for the next five years.

Looking back at what mortgage rates have done over the years can provide context for why rates are sitting where they are today. But remember: Average mortgage rates are only a snapshot of what’s available on the market. You may qualify for a lower rate based on a personalized quote. That’s why we encourage you to compare mortgage rates from banks and brokers across the country.