Variable Mortgage Rate In Canada Falls Below 1% For First Time

Canadian mortgage rates have reached a record low.

According to rate comparison website Ratehub.ca, Canadian homebuyers can now get a variable mortgage rate below 1% for the first time ever.

Specifically, Ratehub.ca said the best five-year variable rate mortgage available on its website is now 0.98%. The rate is offered by mortgage brokerage CanWise Financial.

The best five-year fixed rate available to Canadians is 1.74%.

Mortgage rates across the country have plummeted as the Bank of Canada lowered its benchmark interest rate to record lows to help protect the economy from the shock of the COVID-19 pandemic.

The low mortgage rates have sparked a flurry of activity in the housing market and pushed home prices to new heights.

The historically low mortgage rates might not be here long though as the Canadian economy reopens and growth kicks into high gear. Regardless of how low mortgage rates are they don’t help a homebuyer qualify for a mortgage.

As of June 1, the stress test used for people to qualify for a mortgage has tightened. Canadian homebuyers now must prove that they can handle their mortgage payments at a rate of 5.25%.