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Best 3-Year Variable Mortgage Rates

Last Updated: 27 May, 2020
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Lender Rate Term Amortization Monthly Payment
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4.60% 3 Year, Variable Uninsured 30, Insurable 25 years
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4.95% 3 Year, Variable Uninsured 25 years
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What is a 3 year variable rate?

The term “3 year variable 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 variable rate mortgage means that the interest rate can change throughout the duration of the term (in this case, three years.)

Variable rates are usually priced as prime - %, where prime is the bank’s best lending rate, and the percentage is a discount on that rate. This allows the rate to change as prime does without affecting the calculations every time it does. A rate that is shown as prime – 0.8% would still be prime – 0.8% if prime went up or down.

Variable rates can go up or down, translating into higher or lower monthly payments, respectively.

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.

How popular is a 5 year fixed term?

In Canada, most homebuyers do not choose a variable rate mortgage.

Mortgage Type

Purchase During 2016

Renewal or Refinance During 2016

Did not purchase, renew or refinance in 2016

All mortgages

Fixed rate

80%

74%

66%

68%

Variable (adjustable) rate

17%

21%

27%

25%

Combination

3%

6%

6%

6%

 

With interest rates on the rise, many people may be scared of accepting a variable rate because they will probably end up paying more throughout the term. If the idea of rising rates fills you with dread, then a variable rate is not for you. You should never lose sleep over the idea of your mortgage payments.

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