Update of 5-year variable mortgage rates in Canada as of October 14, 2025

Understanding 5-Year Variable Mortgage Rates in Canada

Introduction

Five-year variable mortgage rates are a popular option for many Canadians considering purchasing property. These rates, offered by the country's major financial institutions, fluctuate based on various economic factors. This article aims to provide an update on the rates in effect as of October 14, 2025, explain how variable-rate mortgages work, explore the reasons for their variations, and analyze recent trends.

What is a variable-rate mortgage?

A variable-rate mortgage is a home loan whose interest rate can change over time, typically based on a bank's prime rate. Unlike a fixed-rate mortgage, where the rate remains constant for the entire term, a variable rate can rise or fall, thereby affecting the amount of the monthly payments.

5-Year variable mortgage rates in effect as of October 14, 2025

Here is an overview of the five-year variable mortgage rates offered by the major Canadian banks as of October 14, 2025:

• Royal Bank of Canada (RBC): 6.78% (soumissionsmaison.com)
• The Toronto-Dominion Bank (TD): 6.72% (soumissionsmaison.com)
• Scotiabank: 7.40% (soumissionsmaison.com)
• Bank of Montreal (BMO): 6.77% (soumissionsmaison.com)
• Canadian Imperial Bank of Commerce (CIBC): 6.95% (soumissionsmaison.com)
• National Bank of Canada (NBC): 6.75% (soumissionsmaison.com)
• Desjardins: 6.75% (soumissionsmaison.com)

It is important to note that these rates are subject to change and may vary based on various factors, including the borrower's credit profile and market conditions.

Why do variable mortgage rates fluctuate?

Variable mortgage rates are primarily influenced by the banks' prime rate, which is itself determined by the Bank of Canada's policy rate. When the Bank of Canada adjusts its policy rate to manage inflation and stimulate the economy, banks adjust their prime rates accordingly, thereby affecting variable mortgage rates.

Recent trends in variable mortgage rates

In 2024, the Bank of Canada reduced its policy rate by 175 basis points, from 5.00% to 3.25% in five successive cuts. This accommodative monetary policy aimed to stimulate the economy in the face of persistent economic challenges. (canadianmortgagetrends.com)

However, despite these reductions, variable mortgage rates have remained relatively high due to various factors, including persistent inflation and housing market conditions. For example, in October 2025, the prime rate in Canada was 4.70%, directly influencing variable mortgage rates. (nesto.ca)

Conclusion

The 5-year variable mortgage rates offered by the major Canadian banks as of October 14, 2025 reflect a combination of monetary policy, economic conditions, and housing market dynamics. For prospective borrowers, it is essential to understand how variable-rate mortgages work, the factors that influence their movements, and recent trends to make informed decisions about real estate financing.

Note: The rates mentioned are subject to change. It is recommended to consult directly with financial institutions or a mortgage advisor to obtain the most up-to-date information.