A guide to five-year fixed mortgage rates + MORE Mar 2nd

This week, our question comes in from 22-year-old Jessica. She asks, “I want to understand how to prepare for a mortgage. How do mortgages work?”

Fixed mortgage rates are once again on the rise after Canada’s 5-year bond yield reached a three-year high earlier this month.

Compared to other mortgage products in Canada, five-year variable-rate mortgages are very attractive when market interest rates are low, as they have been for the last several years. Though historically less popular with Canadians than five-year fixed-rate mortgages, variable-rate mortgages offer the possibility of cost savings for home buyers who can tolerate a degree of fluctuation in market interest rates over their five-year terms. But, like all mortgage products, they do have their drawbacks.

Here’s how five-year variable mortgage rates work and how to know if they are the right fit for your finances. And before signing a mortgage contract, learn more about how they compare to five-year fixed mortgage rates.

You’re 2 minutes away from getting the best mortgage rates in CanadaAnswer a few quick questions to get a personalized rate quoteI’m buying a homeI’m renewing/refinancingYou will be leaving MoneySense. Just close the tab to return.

What is a five-year variable mortgage rate? 

As the name implies, a five-year variable-rate mortgage comes with a mortgage term of five years—that’s the duration for which your mortgage contract remains in effect…

After consecutive years of record-low interest rates in Canada, many experts predict we are entering a period of rising rates—which would make the cost of borrowing money, be it for a mortgage or a student loan, more expensive. The possibility of these rate hikes can make the stability of a five-year fixed mortgage rate seem like a good option compared to one with a variable rate—especially for first-time homebuyers or those about renew their existing mortgage. In fact, five-year fixed-rate mortgages are the most popular mortgage product in Canada. However, as with any financial product, they still have their drawbacks.

Here’s how five-year fixed mortgage rates work and how to know if they are the right fit for your finances. And before speaking to a lender or mortgage broker, learn more about how they compare to five-year variable mortgage rates.

You’re 2 minutes away from getting the best mortgage rates in CanadaAnswer a few quick questions to get a personalized rate quoteI’m buying a homeI’m renewing/refinancingYou will be leaving MoneySense…