Update of Canada's 5-year variable mortgage rates 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 buying property. These rates, offered by major financial institutions in the country, fluctuate based on various economic factors. This article aims to provide an update on current rates as of October 14, 2025, to explain how variable-rate mortgages work, to explore the reasons for their variations, and to analyze recent trends.
What is a variable-rate mortgage?
A variable-rate mortgage is a mortgage loan whose interest rate can change over time, usually based on the banks' prime rate. Unlike a fixed-rate mortgage, where the rate remains constant for the entire term, the variable rate can rise or fall, thus affecting the amount of monthly payments.
5-year variable mortgage rates in effect as of October 14, 2025
Here is an overview of the 5-year variable mortgage rates offered by the major Canadian banks as of October 14, 2025:
- Royal Bank of Canada (RBC): 6.78% (soumissionsmaison.com)
- 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-rate mortgage rates change?
Variable-rate mortgage rates are mainly 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-rate 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 consecutive cuts. This accommodative monetary policy aimed to stimulate the economy in the face of persistent economic challenges. (canadianmortgagetrends.com)
However, despite these cuts, variable mortgage rates 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 policies, economic conditions, and real estate market dynamics. For potential borrowers, it is essential to understand how variable-rate mortgages work, the factors influencing their movements, and recent trends in order to make informed decisions regarding 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.
