Mortgage Rates Explained: How They Work and Where to Find Current Rates

What Determines Mortgage Rates in Canada?

Mortgage interest rates in Canada are not set in a vacuum. They are influenced by the broader economy, the type of mortgage you choose, and your individual borrower profile. Lenders assess these factors to price the risk of lending you money, and the result is the rate you are offered.

The Bank of Canada’s policy rate serves as a benchmark for many lending products, but it is not the only factor. Market conditions, inflation, and the lender’s cost of funds all play a role. For borrowers, the size of your down payment, your credit score, your employment income, and the amount you borrow can affect the rate you are quoted.

Sources: Government of Canada

Fixed vs. Variable Mortgage Rates: Key Differences

The two main types of mortgage rates are fixed and variable. A fixed interest rate stays the same for the entire term of your mortgage, giving you predictable payments. This can be attractive if you want certainty about your monthly housing costs over a set period, such as five years.

A variable interest rate, on the other hand, may increase or decrease during the term as the lender’s prime rate changes. Your payments can go up or down (depending on your payment structure), and you take on the risk that rates could rise. However, you may benefit if rates fall.

• Fixed rates: payments remain unchanged over the term.
• Variable rates: payments can fluctuate with changes in the prime rate.

Sources: Government of Canada

How Lenders Calculate Your Mortgage Payment

When you take out a mortgage, the lender uses a few key inputs to determine your payment amount: the principal (how much you borrow), the term (the length of your mortgage contract), the amortization (the total time it takes to pay off the loan), and the interest rate. These factors combine to produce your regular payment.

For example, a larger principal, a longer amortization, or a higher interest rate will generally lead to higher payments. Understanding how these elements interact can help you compare different mortgage offers and plan your budget.

Sources: Government of Canada

Where to Access Current TD Mortgage Rates

TD Bank publishes both posted mortgage rates and special discounted rates on its official website. The posted rates are the standard rates that are publicly advertised, while the special rates may be lower and are often available to certain borrowers or through specific programs.

Because mortgage rates can change frequently, the most reliable and up-to-date information is always available directly from TD’s official site. Third-party sources, such as NerdWallet Canada, also list TD rates, but for the most accurate figures you should verify them on TD’s own web page.

Note that current rates are not published on this page. For the latest TD mortgage rates, please visit the official TD website.

• TD’s posted rates are available on the bank’s official mortgage rates page.
• Special rates may be lower than posted rates and are often linked to promotions or pre-approvals.

Sources: TD Canada Trust, NerdWallet Canada

Comparing Mortgage Rates from Different Lenders

To find the best mortgage rate for your situation, it’s wise to compare offers from multiple lenders, including the Big Six banks, credit unions, and alternative lenders. Rates can differ significantly between lenders, and even within the same bank, insured vs. uninsured mortgages often have different rates.

When comparing rates, be sure to consider the type of rate (fixed or variable), the term length, and any conditions attached. Lenders may quote different rates based on the size of your down payment, your credit history, and whether the mortgage is insured. For the most accurate and current rates, contact each lender directly.

Sources: Government of Canada, NerdWallet Canada

Rate Holds and Renewal Options

When you get a mortgage pre-approval, many lenders offer a rate hold, which locks in a guaranteed interest rate for a certain period. For example, TD offers a 120-day rate hold with its mortgage pre-approval. This means that even if rates rise during that time, you can still get the rate you were quoted, subject to all conditions. Be sure to check with TD for the most current terms and conditions of their rate hold offer.

At renewal, your mortgage term ends, and you renegotiate your interest rate. This is your opportunity to shop around and potentially switch lenders or negotiate a better rate. You can also consider using a mortgage broker to help you find competitive offers. Understanding your renewal options and how a rate hold works can help you make more informed decisions about your mortgage.

• TD's 120-day rate hold applies to fixed-rate mortgages with a pre-approval, but verify current terms on TD's website.
• Renewal is a chance to renegotiate your interest rate and possibly change lenders.

Sources: TD Canada Trust, Government of Canada

How the Bank of Canada Policy Rate Influences Mortgage Rates

The Bank of Canada’s policy rate is a key benchmark that influences the prime rates that banks charge their best customers. Changes to the policy rate can affect variable mortgage rates, which often move in tandem with the prime rate. However, the policy rate is just one of several factors that determine the mortgage rate you are offered.

Fixed mortgage rates are more influenced by bond yields and market expectations about future interest rates. Lenders also consider their own funding costs and competitive position. Because of these many influences, mortgage rates can change frequently, and it is important to check the latest rates from your lender or a trusted financial source.

Sources: Government of Canada, WOWA.ca