Best variable mortgage rates in Canada
A variable mortgage is priced as prime minus a discount, so it moves whenever the Bank of Canada moves. You give up the certainty of a fixed payment, but you gain two things that matter: variables win outright when the Bank cuts, and their break penalty is capped at just three months’ interest — a fraction of a fixed mortgage’s IRD. Here are the verified variable offers and how to decide if floating suits you.
The short answer
- What it is
- Prime minus a discount — floats with the Bank of Canada
- Why people pick it
- Wins if rates fall; small, capped break penalty
- The catch
- Payment (or amortization) can rise if prime rises
- Break penalty
- Usually just three months’ interest
Verified 5-yr variable offers
Verified at the source · June 20, 2026| Lender | Product | Rate | Type | |
|---|---|---|---|---|
| Nesto | 5-yr variable · insured | 3.40% | special | source |
| RBC | 5-yr variable · prime − 0.50 · high-ratio 3.65 | 3.95% | special | source |
| Tangerine | 5-yr variable | 4.00% | special | source |
| BMO | 5-yr variable · amortization ≤25y | 4.10% | special | source |
| CIBC | 5-yr variable · high-ratio flex 3.95 | 4.10% | special | source |
| National Bank | 5-yr variable | 4.10% | special | source |
| First National | 5-yr variable · prime − 0.26 · insured 3.70 | 4.19% | posted | source |
| TD | 5-yr variable · TD prime − 0.36 | 4.24% | special | source |
| Scotiabank | 5-yr variable · Flex Value | 4.90% | posted | source |
Advertised special-offer rates for standard residential mortgages, read at each lender's own page. Insured (high-ratio) pricing is typically lower than uninsured; many lenders only advertise one. Brokers and smaller lenders frequently beat every rate in this table.
How a variable rate is actually priced
A variable mortgage is quoted as the lender’s prime rate minus a discount — for example "prime − 0.50%". Prime itself sits roughly 2.2 points above the Bank of Canada’s policy rate, so when the Bank raises or cuts, prime follows within days and your variable rate moves with it. The discount portion is fixed for your term; only the prime side floats.
That is the key mental model: you are not betting on a number, you are betting on the direction of the Bank of Canada. If you think the Bank is done hiking and leaning toward cuts, a variable captures every one of those cuts automatically. If you think rates are heading up, a fixed locks you out of the pain.
The penalty advantage almost nobody mentions
The under-appreciated edge of a variable mortgage is the exit. Breaking a variable almost always costs just three months’ interest — there is no interest-rate-differential calculation. On a $450,000 mortgage that is a few thousand dollars, versus a fixed-rate IRD penalty that can run into five figures. If there is any real chance you will sell, relocate, or refinance mid-term, that capped penalty can be worth more than a small difference in headline rate.
Use our penalty calculator to see the gap between a variable’s three-month penalty and a fixed mortgage’s IRD on your own numbers — it is often the deciding factor.
Fixed-payment vs adjustable-payment variables
Not all variables behave the same when prime rises. With an adjustable-rate mortgage, your payment changes immediately with prime — you feel every move, but your amortization stays on track. With a fixed-payment variable, the payment stays level and more of it shifts to interest as rates climb; push far enough and you can hit your trigger rate, where the payment no longer covers the interest and the lender forces an increase. Know which kind you are signing, because they feel very different in a rising-rate stretch.
Choose it when
- You think the Bank of Canada is more likely to cut than hike
- There is a real chance you break the mortgage early (small penalty)
- Your budget can absorb a payment increase if prime rises
- You want the option to lock into a fixed later (most variables allow it)
Think twice when
- A payment increase would strain your budget
- You value a predictable payment above all else
- You expect rates to climb over your term
Do something with these rates
Turn a rate into a real payment and amortization schedule.
IRD vs three months' interest — the cost of leaving early.
CMHC's 39/44 limits at the stress-test rate, premium included.
Contract + 2% or the 5.25% floor — the payment you must prove.
Frequently asked questions
How does a variable mortgage rate work in Canada?
It is priced as your lender’s prime rate minus a fixed discount. Prime tracks the Bank of Canada’s policy rate, so when the Bank cuts or hikes, prime follows and your rate moves with it. The discount is locked for your term; only the prime side floats. You win when rates fall and pay more when they rise.
Is the penalty to break a variable mortgage really lower?
Yes — breaking a variable almost always costs three months’ interest, with no interest-rate-differential calculation. That is typically a few thousand dollars versus a fixed mortgage’s IRD penalty, which can reach five figures. If there is any chance you will move or refinance mid-term, that capped penalty is a major point in the variable’s favour.
What is a trigger rate on a variable mortgage?
It applies to fixed-payment variables, where the monthly payment stays level even as prime rises. The trigger rate is the point where your set payment no longer covers the interest charged. Hit it and the lender will require a higher payment or a lump sum. Adjustable-payment variables avoid this because the payment moves with prime from the start.
Can I switch from variable to fixed later?
Most variable mortgages let you convert to a fixed term at any time without penalty, at the lender’s fixed rates of the day. It is a useful safety valve, but remember you convert at whatever fixed rates exist then — which usually means after the market has already priced in the moves you were worried about.
Educational content, not financial advice or a rate guarantee. Lender specials were read at each lender's own page on the stamped date — monoline/digital rows refresh automatically each morning, big-bank rows by hand — and change without notice. Qualification rules per OSFI; insurance rules per CMHC and the Department of Finance.