Analysis of 5-year variable mortgage rates in October 2024

In October 2024, the 5-year variable mortgage rates of the major Canadian banks underwent significant adjustments, directly influencing homebuyers and homeowners. This article examines the rates in effect, compares them, analyzes their impact, and offers guidance for choosing the mortgage product best suited to the current context.

5-year variable mortgage rates in October 2024

In October 2024, the prime rate of the major Canadian banks was 6.45% as of September 4, then was reduced to 5.95% on October 23. (wowa.ca) The 5-year variable mortgage rates are generally indexed to this prime rate, with a margin determined by each financial institution.

Here is an overview of the prime rates of the major banks in October 2024:

• Royal Bank of Canada (RBC) : 5.95%
• Toronto-Dominion Bank (TD) : 5.95%
• Scotiabank : 5.95%
• Bank of Montreal (BMO) : 5.95%
• Canadian Imperial Bank of Commerce (CIBC) : 5.95%
• National Bank of Canada : 5.95%
• Desjardins : 5.95%

These prime rates serve as the basis for determining the variable mortgage rates offered to clients. Banks typically apply an additional margin or a discount depending on the borrower's profile and market conditions.

Comparison of rates and impact on buyers

The drop in the prime rate in October 2024 had a direct impact on variable mortgage rates. For example, a 0.50 percentage point reduction in the prime rate can lead to an equivalent decrease in the variable mortgage rate, thereby reducing borrowers' monthly payments.

Example of impact on monthly payments :

• Mortgage of $400,000 over 25 years :
• Initial rate: 6.45%
• Rate after the reduction: 5.95%
• Monthly savings: about $118
• Annual savings: about $1,416

These savings can improve housing affordability for many Canadians by reducing the total cost of the loan.

Tips for choosing the right mortgage product

In the current context, it is essential to carefully evaluate options before choosing a mortgage product. Here are a few tips:

1. Compare offers : Although prime rates are similar among the major banks, the margins applied can vary. It is therefore crucial to compare offers from several institutions.

2. Assess your risk tolerance : Variable rates can fluctuate based on the Bank of Canada's decisions. If you prefer stability, a fixed rate could be more appropriate.

3. Consider the holding horizon : If you plan to sell your property or refinance in the short term, a variable rate could offer more flexibility.

4. Consult a financial advisor : A professional can help assess your financial situation and choose the product best suited to your needs.

Conclusion

The adjustments to 5-year variable mortgage rates in October 2024 offer opportunities for Canadian homebuyers and homeowners. By staying informed and carefully evaluating your options, you can make informed decisions to optimize your mortgage financing.

Sources :
- Canadian prime rate history (1935 - October 2025) | WOWA.ca
- Historic drop in mortgage rates: Impact on your mortgage | hypotheques.ca