Current Best Mortgage Rates in Canada — March 2025

By Robert McLister | Published March 28, 2025

Canada’s mortgage landscape is continually evolving, with borrowers seeking the most favorable rates amid fluctuating market conditions. For those in the market for a new mortgage or refinancing an existing one, understanding the current rates can significantly impact financial planning and overall costs. This article provides a comprehensive overview of the best mortgage rates available in Canada today, highlighting both insured and uninsured options.

Staying Updated on Mortgage Rates

To assist borrowers in navigating the complex mortgage market, we update our mortgage rates daily based on data from MortgageLogic.news. This platform compiles rates from top mainstream lenders and ensures that the information provided reflects the most competitive offers available. Bookmark this page for easy access to continuously updated rates, and keep informed about your lending options.

Navigating Canada’s Mortgage Market

Finding the right mortgage deal involves more than just looking at the headline rate. The best rates often come with conditions, particularly the requirement for mortgage default insurance, which protects lenders from potential defaults on loans. Here’s a deeper look into what qualifies you for the best rates and how you can effectively navigate your options.

Understanding Mortgage Default Insurance

Mortgage default insurance is mandated for most new mortgages that require less than a 20% down payment. This insurance reduces the risk for lenders, thereby allowing them to offer lower interest rates. While it may seem counterintuitive for borrowers putting down less to receive better rates, the system is designed to mitigate risk and alleviate costs for lenders.

Quick Tip for Borrowers:

Ensure that if you switch lenders at the maturity of your mortgage without increasing your borrowing, the new lender retains your mortgage insurance, which could qualify you for lower rates both now and in the future.

Qualifying for Lower Rates

To secure the lowest mortgage rates, borrowers typically need to meet specific criteria:

• Credit Score: A score of 720 or higher is generally required, although some lenders might permit lower scores.
• Credit History: A clean credit report without late payments or derogatory marks in recent years is crucial.
• Debt-to-Income Ratios: Monthly housing costs should not exceed 39% of gross monthly income, while total monthly debt obligations must be under 44%.
• Income Documentation: Borrowers must provide proof of income through job letters, pay stubs, or tax documents if self-employed.
• Closing Timeline: Some lenders necessitate that closing occurs within a specific timeframe, often within 30 days, to lock in the lowest rates.
• Marketable Property: Homes that are easily sellable are more likely to qualify for the best rates.

The Stress Test and Its Implications

Canada’s federally-regulated lenders employ a stress test to evaluate if borrowers can manage their mortgage payments under economic stress. This means assessing debt ratios at a rate that is 200 basis points above the actual contract rate or 5.25%, whichever is higher. This requirement can complicate qualification for some borrowers, particularly those with higher debt-to-income ratios.

Notably, effective November 21, 2024, new regulations state that the stress test no longer applies to borrowers switching lenders, given that the mortgage amount and amortization remain unchanged. This change represents a significant shift in the lending environment, offering more flexibility to existing mortgage holders looking to refinance.

Rate Surcharges for Non-Prime Borrowers

For borrowers classified as non-prime—those with bad credit, hard-to-prove income, or high debt ratios—accessing lower mortgage rates can be particularly challenging. Lenders may impose higher fees or rates on non-prime loans, reflecting the increased risk involved.

Conclusion

In conclusion, as the mortgage market in Canada continues to evolve, borrowers must stay informed about the rates available to them and the conditions that affect these rates. By understanding the intricacies of mortgage default insurance and qualification requirements, prospective homeowners can better position themselves to secure the best financing options available. For ongoing updates, be sure to check back frequently and consult with financial professionals to navigate your mortgage journey effectively.

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