Apr 30, 2021
Published by Derek Timmons

How to Benefit from Low Mortgage Rates

Are you thinking about buying a home or refinancing your home this year? Now is the time to start thinking about how you can benefit from record low-interest rates for mortgages in Canada.

Due to the COVID-19 pandemic, the Bank of Canada lowered its policy interest rate to a record low of 0.25% in March 2020. This is the interest rate that all major financial institutions like RBC or CIBC borrow from.

This has led to extremely low-interest rates for people looking to buy a new home or refinance their current home’s mortgage. 

In this article, we will look at some of the ways you can take advantage of this, and the different deals that some banks are offering customers to switch lenders.

So without further ado, these are the ways you can take advantage of mortgage rates in Canada in 2021.

Record Low-Interest Rates

Thanks to COVID-19 decimating the economy across the world and in Canada, the Bank of Canada lowered their policy interest rates to help incentivize lenders to give better deals on mortgages and help Canadians out through this whole thing.

This has led to some dramatic changes in their financing structure that can be utilized by people of all mortgage types and amounts.

There is a little math involved to determine if it’s worth it to make the switch. Luckily, we will be going over everything you need to know about refinancing your mortgage in 2021.

Make Sure To Look Into Your Break Fees

Each financial institution has different policies for break fees. But typically, breaking your mortgage will cost three months’ worth of interest. It’s very important to take this into account when thinking about switching lenders.

Current Interest Rates as of April 2021

Interest rates between the Big 5 (RBC, Scotia, BMO, TD, and CIBC) are a bit different compared to mortgage broker rates. Let’s go over some of the key differences between them.

CIBC Mortgage Rates

Currently, CIBC is offering 3-year variable mortgage rates at a 2.45% interest rate. This isn’t the greatest deal at the moment when compared to other lenders as this interest rate is significantly higher than other fixed rates. We highly recommend NOT going with this option.

However, they have much better rates going for their 5-year variable mortgage rates. This is currently sitting at 1.54% with a prime of 0.91. When compared to other fixed mortgage rates, this is one of the better options even with the prime amount.

CIBC is also offering up to $3,000 cashback for refinancing your current mortgage with them. This can offset break fees, and make the switch much more appealing.

Here is a full list of their fixed and variable rates and term amounts as of April 2021. We did not include information about open mortgages, high-ratio mortgages, and convertible mortgages.

CIBC Fixed Rate Mortgages

TermPosted RateSpecial Rate
1 year2.79%N/A
2 years2.89%N/A
3 years3.49%N/A
4 years4.24%N/A
5 years4.79%2.44%
7 years5.60%2.94%
10 years6.09%N/A

CIBC Variable Rate Mortgages

TermPosted RateSpecial Rate
3 years2.45%N/a
5 years2.45%1.60%

Find out more information on CIBC’s rates here.

BMO Mortgage Rates

The Bank of Montreal is currently offering several new mortgage rates to choose from such as their 5-year smart fixed rate of 2.34% with a default insured mortgage.

They also have another 5-year smart fixed rate with an amortization of 25 years or lower sitting at 2.44%.

Their variable fixed rate seems to be one of the best options sitting at 1.55% under a 5-year term.

They are also currently offering up to $3,500 in cashback for refinancing your mortgage with them similar to CIBC’s offer.

Here is a full list of their mortgage rates and terms for you to look at.

BMO Fixed and Variable Rates

TermPosted RateSpecial Rate
3 year fixed2.24%N/A
5 year smart fixed2.44%N/A
5 year smart fixed (default)2.34%N/A
5 year variable1.55%N/A

Find out more information on BMO’s rates here.

RBC Mortgage Rates

RBC currently has a few special options to choose from. These are their 2 year fixed rates sitting at 2.090%, their 5 year fixed at 2.49%, and their 5 year variable sitting at 1.6% with a prime rate of 0.85%.

These rates are slightly better than BMO and CIBC when strictly looking at the numbers. It’s important to take cashback offers into account as well as break fees, however.

Here is a full list of their fixed and variable mortgage rates as of April 2021.

RBC Fixed Mortgage Rates

TermPosted RateSpecial Rate
1 year closed2.44%N/A
2 year closed2.090%2.090%
3 year closed2.24%N/A
4 year closed2.39%N/A
5 year closed2.49%2.49%
7 year closed3.19%N/A

RBC Variable Rate Mortgage

TermPosted RateSpecial Rates
5 year closed1.6% with a prime rate of 0.85%1.6% with a prime rate of 0.85%

Find out more information on RBC’s rates here.

TD Bank Mortgage Rates

One offer from TD Bank that stands out is their 3-year 2.14% fixed mortgage rate. This deal is much better than what their counterparts are offering and could be useful to some homeowners out there.

They also have a few other special deals on the go right now for their 5-year fixed closed rates, 5-year fixed closed high-ratio rates, and their 5-year variable closed rates.

TD Fixed Rate Mortgages

TermPosted RateSpecial Rate
1 year fixed closed2.79%N/A
2 year fixed closed2.94%N/A
3 year fixed closed3.49%2.14%
4 year fixed closed3.74%N/A
5 year fixed closed4.59%2.44%
6 year fixed closed5.24%N/A
7 year fixed closed5.35%N/A
10 year fixed closed5.60%N/A

TD Variable Rate Mortgages

TermPosted RateSpecial Rate
5 year variable closed1.55% with a 1.05% prime rateN/A
5 year variable open3.60% with a 1% prime rateN/A

Find out more information on TD’s rates here.

Scotiabank Mortgage Rates

Scotiabank currently has several special offers on the go right now. These are for its 5 year fixed rate mortgages which are sitting at 2.29% and its 10-year mortgage rate at 3.24%.

These are great options for homeowners looking for a longer-term on their mortgage. The 10-year mortgage rate is significantly better than its competitors by a large margin and is a solid option for those looking for a 10-year term.

Scotiabank Fixed Mortgage Rates

TermPosted RateSpecial Rate
1 year fixed closed2.79%N/A
2 year fixed closed2.89%N/A
3 year fixed closed3.49%N/A
4 year fixed closed3.89%N/A
5 year fixed closed4.79%2.29%
7 year fixed closed5.29%N/A
10 year fixed closed5.69%3.24%

Scotiabank Variable Mortgage Rates

TermPosted RateSpecial Rate
3 year closed3.35%N/A
5 year closed2.65%N/A
5 year open5.75%N/A

Find out more information on Scotiabank’s rates here.

Pick the Best Option Based on Your Situation

Out of all of these deals, it comes down to you to decide which one will work best for you. Do the math, conclude what you think is the best deal and that you can benefit the most from.

If you are having trouble with the numbers, either use a mortgage calculator or consult a professional to help you. Your home is typically one of the biggest investments someone makes in their life, and shouldn’t be taken lightly.

Unfortunately, just like COVID-19, these deals won’t last forever. It is expected that these mortgage rates will start to rise again in 2022, so remember to keep that in mind while you are shopping around for new mortgage rates.

If you’re looking to buy a home in Airdrie, why not let us look for you? Just tell us your criteria and we’ll build out a customized portal with all the properties that match.

Click here to get started!

Written By

Derek Timmons

Derek is a top performing REALTOR® in Airdrie, Alberta, Canada. Aside from knowing the market, he uses his knowledge and experience in construction to help clients understand exactly what they're in for when buying and selling real estate.