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Best 1-Year Fixed Mortgage Rates

Last Updated: 02 Feb, 2023
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Lender Rate Term Amortization Monthly Payment
Home Trust

Home Trust

4.75% 1 Year, Fixed Insured 25 years
Equitable Bank

Equitable Bank

5.04% 1 Year, Fixed Insured 25 years
Equitable Bank

Equitable Bank

5.04% 1 Year, Fixed Insurable 25 years
DUCA Credit Union

DUCA Credit Union

5.19% 1 Year, Fixed Insured 25 years
DUCA Credit Union

DUCA Credit Union

5.24% 1 Year, Fixed Insurable 25 years
DUCA Credit Union

DUCA Credit Union

5.39% 1 Year, Fixed Uninsured 30 years
First National

First National

5.39% 1 Year, Fixed Insured 25 years
TD Bank

TD Bank

5.44% 1 Year, Fixed Insured 25 years
B2B Bank

B2B Bank

5.49% 1 Year, Fixed Insured 25 years
First National

First National

5.49% 1 Year, Fixed Insurable 25 years
ScotiaBank

ScotiaBank

5.64% 1 Year, Fixed Insured 25 years
ScotiaBank

ScotiaBank

5.64% 1 Year, Fixed Insurable 25 years
ScotiaBank

ScotiaBank

5.64% 1 Year, Fixed Uninsured 30 years
ScotiaBank

ScotiaBank

5.64% 1 Year, Fixed Uninsured 30 years
First National

First National

6.39% 1 Year, Fixed Uninsured 30 years
First National

First National

6.39% 1 Year, Fixed Uninsured 30 years
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What is a 1-year fixed rate?

The term “1-year fixed rate” is made up of two parts: the length of time and the type of mortgage.



The length of term is how long you agree to a certain set of conditions for your mortgage, and the type of mortgage dictates the interest rate you’ll pay. A fixed rate mortgage means that the interest rate won’t change throughout the duration of the term (in this case, one year).

When the term ends, your mortgage isn’t paid off. The end of a term means you’ll have to get a new term, with new conditions and interest rates.

 

 

Who is a 1-year fixed term best for?

There are a couple reasons to go for a 1-year fixed term:

1.       You expect to fully pay off your mortgage within a year, or move

2.       You want the ability to refinance in the next year without penalty

 

However, there are a few downsides to this as well:

1.       If rates are going up, you will have to renew into a higher rate years sooner than a longer term

2.       If you want to switch lenders at every renewal, you’ll have to pay more in switching costs

3.       If rates are going down, you would save more money with a variable rate

 

 

How popular is a 1-year fixed term?

In Canada, most homebuyers choose a fixed rate mortgage. Mortgage terms between 2 – 4 years are the second most popular option but are far behind 5-year fixed terms. 2 – 4-year terms are the most popular with homebuyers under the age of 55, at 23%. Those with a mortgage over the age of 55 overwhelmingly choose a 5-yearmortgage and are almost evenly split between a 2 – 4-year term and a 6 – 10-year term.

 

Mortgage Type

Mortgage Holders Under 55

Mortgage Holders
Over 55

1 year

6%

6%

2 – 4 year

23%

12%

5 year

65%

69%

6 – 10 year

6%

10%

11+ year

0%

2%

 

1-year mortgages are extremely unpopular in Canada, with only 6% of the population having them. They have the lowest interest rates out of all the fixed rates, but with the inconvenience of having to renew every year. Not only that, but if you have to renew every year into rising rates, you will pay more than a comparable variable term over the same amount of time, as variable rates have deeper discounts on prime rate.

With the fear of rising interest rates, many homebuyers and mortgage holders needing to renew will probably opt for a fixed mortgage. 

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