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Best 5-Year Variable Mortgage Rates

Last Updated: 16 Aug, 2019
Sort by:
Lender Rate Term Amortization Monthly Payment
Exclusive

Exclusive Lender

2.75% 5 Year, Variable Insured 25 years
MCAP

MCAP

2.90% 5 Year, Variable Insured 25 years
Meridian Credit Union

Meridian Credit Union

2.90% 5 Year, Variable Insured 25 years
Exclusive

Exclusive Lender

2.90% 5 Year, Variable Insured 25 years
Right Mortgage

Right Mortgage

2.90% 5 Year, Variable Insured 25 years
RMG Mortgage

RMG Mortgage

2.90% 5 Year, Variable Insured 25 years
Lendwise

Lendwise

2.90% 5 Year, Variable Insured 25 years
Exclusive

Exclusive Lender

2.90% 5 Year, Variable Insured 25 years
Marathon Mortgage

Marathon Mortgage

2.95% 5 Year, Variable Insured 25 years
B2B Bank

B2B Bank

2.95% 5 Year, Variable Insured 25 years
Merix Financial

Merix Financial

2.95% 5 Year, Variable Insured 25 years
First National

First National

2.95% 5 Year, Variable Insured 25 years
Industrial Alliance

Industrial Alliance

2.95% 5 Year, Variable Insured 25 years
Street Capital

Street Capital

2.95% 5 Year, Variable Insured 25 years
CMLS

CMLS

3.00% 5 Year, Variable Insured 25 years
Home Trust

Home Trust

3.00% 5 Year, Variable Insured 25 years
MCAP

MCAP

3.05% 5 Year, Variable Insurable 25 years
TD Bank

TD Bank

3.08% 5 Year, Variable Insured 25 years
Desjardins

Desjardins

3.10% 5 Year, Variable Insured 25 years
Desjardins

Desjardins

3.10% 5 Year, Variable Insurable 25 years
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What is a 5-year variable rate?

The term “5-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, five years.)

Variable rates are 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.

 

 

Who is a 5-yearvariable term best for?

There are a couple reasons to go for a 5-year variable term:

1.       You want to take advantage of the discounted rates

2.       You believe rates will go down

3.       You aren’t worried about the possibility of rising rates

 

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

1.       If rates go up, your monthly payment goes up as well

2.       They can be harder to get approved for if you have higher-than-average debt ratios

 

 

How popular is a 5-yearvariable term?

In Canada, most homebuyers do not choose a variable rate mortgage. Among those that do, 5 years is the most popular option.

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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Posted at: 2019-07-16

What does a rate increase mean for your mortgage? That depends on the type of mortgage you have. If you have a fixed rate mortgage, then nothing changes. You will keep paying the same monthly amoun...

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