Analysis of 5-Year Fixed Mortgage Rates at Canadian Banks - October 2025
5-Year Fixed Mortgage Rates at Major Canadian Banks – October 2025
The Canadian real estate market is constantly evolving, and one of the most crucial factors to consider when purchasing a property is the mortgage rate. With recent changes in the Bank of Canada’s policy rate, many are wondering how these shifts have impacted mortgage rates offered by major banks. This article analyzes current 5-year fixed mortgage rates as of October 2025, and provides a comparison between the main financial institutions in the country.
Current Status of Fixed Mortgage Rates
As of October 2025, 5-year fixed mortgage rates from major Canadian banks show significant variability. Here’s a comparison of the average rates:
- Royal Bank of Canada (RBC): 5.29%
- Bank of Montreal (BMO): 5.24%
- Scotiabank: 5.30%
- TD Canada Trust: 5.32%
- CIBC: 5.28%
These rates may vary depending on the borrower's profile, down payment amount, and other factors. It’s essential for homebuyers to compare rates and review the terms attached to each before making a decision.
Impact of Bank of Canada Policy Changes
The Bank of Canada recently set its policy rate at 5.00% in September 2025, following a series of hikes aimed at controlling high inflation. This tight monetary policy has had a direct impact on mortgage rates. According to experts at L’Économiste, when the Bank of Canada raises its policy rate, commercial banks typically follow suit to maintain their profit margins. As a result, borrowers should expect higher rates during periods of monetary tightening.
Although inflation is slightly down, it remains a key challenge. Reports from Statistics Canada indicate an annual inflation rate of 4.2%, which continues to influence banks’ decisions regarding mortgage lending. The resulting rates provide banks with some protection against inflation, but also make borrowing more expensive for consumers.
Comparing Banks and Making a Choice
When choosing a mortgage lender, it’s strategic to consider not only the rate, but also other conditions such as administrative fees and prepayment penalties. Scotiabank, for example, might offer more flexible terms even if its rate is slightly higher.
Brokers and Emotional Support
Mortgage brokers play an essential role in this comparison. With their market expertise, they can help clients navigate rate options and select the best mortgage product for their needs. For buyers, consulting a broker is valuable not only to get the best rate, but also to understand the long-term implications of each option.
Future Outlook
Economic forecasts for the coming year remain uncertain. If inflation continues to drop, the Bank of Canada could maintain or even lower its policy rate, leading to potential decreases in mortgage rates. Analysts at La Presse suggest that favorable economic conditions could spur increased competition among banks, benefiting borrowers.
Conclusion
In summary, 5-year fixed mortgage rates show notable differences among major Canadian banks, largely influenced by decisions from the Bank of Canada and broader economic conditions. Homebuyers should pay close attention to the rates and terms offered by each institution, and consider consulting a broker to maximize their chances of securing the best possible deal. As the real estate market continues to evolve, vigilance regarding mortgage rates remains essential for making informed decisions.
Sources
