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Compare current 3-year fixed mortgage rates across Canada

No matter your location in Canada, we’re here to guide you to the best mortgage rates available. Quickly access the lowest 3-year fixed rates, helping you secure a stable and predictable payment schedule for the next 3 years.

Rates shown here are for insured mortgages from $700k to less than $925k. Some conditions apply.
For visualization purposes only. Get a clearer view with our Mortgage Payment Calculator.

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For today, {date}, nesto’s {term}-year {type} mortgage rate is {bps} bps ({bps_percent}) lower than the similar average at Canada’s Big 6 Banks. On a {mortgage_ammount} mortgage over a {amortization_period}-year amortization, with nesto your monthly payment would be {nesto_monthly_payment}, saving you up to {monthly_savings} on your monthly payment. This equals {savings_interest} in interest saved while also paying down an extra {extra_payment} on principal over your term.

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For Wednesday, April 17, 2024:

The average insured bank interest rates in Canada on a 3-year fixed-rate mortgage are down 2 basis points since last week and now stand at 6.02%. Compared to a month ago, this rate is down 8 basis points.

1 basis point is 1/100 of a percentage point which is equal to 0.01%.

What is the best 3-year fixed mortgage rate in Canada?

The average insured 3-year fixed mortgage rate from big banks in Canada is 6.02%, while nesto’s lowest 3-year fixed mortgage rate in Canada is

Note: The average rate is calculated based on the posted rates of the 6 biggest lenders in Canada that together make up over 70% of the retail mortgage market in the country. These 6 biggest lenders are the chartered banks: Toronto-Dominion Canada Trust (TD), Royal Bank of Canada (RBC), Bank of Montréal (BMO), Bank of Nova Scotia (BNS), Canadian Imperial Bank of Commerce (CIBC) and National Bank of Canada (NBC).

What is the lowest 3-year fixed mortgage rate in Canada?

The national average posted 3-year conventional fixed mortgage rate is 6.99%. The lowest 3-year fixed rates are typically reserved for insured prime lending, with nesto at and the national 3-year insured average sitting at 6.02%.

Note: The average rate is calculated based on the posted rates of the 6 biggest lenders in Canada that together make up over 70% of the retail mortgage market in the country. These 6 biggest lenders are the chartered banks: Toronto-Dominion Canada Trust (TD), Royal Bank of Canada (RBC), Bank of Montréal (BMO), Bank of Nova Scotia (BNS), Canadian Imperial Bank of Commerce (CIBC) and National Bank of Canada (NBC).

Find The Best 3-Year Fixed Mortgage Rates

Currently, 70% of Canadian homeowners choose a fixed rate. Additionally, more than 60% choose a 5-year term for their mortgage renewal – making the 5-year fixed rate the most common choice for mortgages in Canada.  Although not the most popular, a 3-year term may suit your mortgage needs.

A 3-year fixed-rate mortgage means a fixed payment with a set amount going to principal and interest for your 36-month term. Once your term ends, you’ll come up for renewal.  

As each term on your mortgage eclipses, you’ll renew into a new term and rate that suits your mortgage needs. Your choice will depend on your financial and lifestyle circumstances and the economic conditions affecting mortgage rates at that time. 

How To Find The Best 3-Year Fixed Mortgage Rates And Save Money

Are you in the market for a new home or looking to renew or refinance your current mortgage? If so, you’ll want to pay close attention to the current 3-year fixed mortgage rates. 

A fixed-rate mortgage can offer peace of mind and stable payments for a set period, but finding the best rates can save you thousands of dollars over your amortization. This page is dedicated to exploring how to find the best 3-year fixed mortgage rates, including tips for negotiating with lenders and understanding the factors that impact rates.

If you’re still mulling your options between a fixed-rate or a variable-rate mortgage, please visit our dedicated pages to help you learn and choose between the two. 

We have compiled a list of pros and cons of choosing a 3-year fixed rate. However, after reviewing our list, you’ll notice that the advantages of choosing 3-year fixed rates outweigh the disadvantages. Ultimately, the choice and reasons for choosing one or the other will be based on your personal circumstances. 

Advantages Of A 3-Year Fixed Mortgage Rate

There are several advantages to a 3-year fixed mortgage rate. 

#1 – Predictable Payments

Your interest rate is fixed for 3 years, so you won’t have to worry about your payments changing. 

#2 – Better Than Variable 

A 3-year fixed rate is historically lower than a 5-year variable-rate mortgage. Your monthly payments will be lower, which can save you money. 

#3- Peace of Mind

A fixed mortgage rate can offer peace of mind, as you won’t have to worry about your payments increasing if interest rates rise.

#4 – Lower Rate

3-year fixed mortgage rates are typically priced lower than 5-year fixed rates.

#5 – Lower Discharge Penalty

3-year fixed mortgages come with a lower discharge penalty as the number of months remaining on your mortgage at the time of payout would most likely be less than if you had a 5-year fixed mortgage.

Disadvantages Of A 3-Year Fixed Mortgage Rate

While a 3-year fixed mortgage rate has many advantages, there are also some disadvantages. 

#1 – Shorter Term 

One of the most significant disadvantages is that the interest rate is fixed for only three years. This limit means that after the 3-year term is up, your mortgage rate will adjust to the current market rate. If interest rates have risen during that time, your payments could increase significantly.

#2 – Fixed Rate Locked-In Feature

A 3-year fixed mortgage rate means you cannot take advantage of lower interest rates if they become available. If interest rates drop during your 3-year fixed term, you can only take advantage of lower rates if you pay a break penalty to end your term early.

#3 – Higher Discharge Penalty

A 3-year fixed mortgage rate typically comes with a higher interest rate differential (IRD) discharge penalty than a 3-year variable mortgage rate. Your fixed mortgage will come with a penalty calculated as the greater of 3 months interest or interest rate differential; comparatively, your variable mortgage will only have much lower 3 months’ interest. Unless current rates are much lower than when you arranged your mortgage, the fixed mortgage could have a significantly higher penalty than a variable mortgage. 

Factors That Affect Fixed Mortgage Rates

Several factors can impact fixed mortgage rates. One of the most significant factors is the current state of the economy. If the economy is hot and the Bank of Canada (BoC) increases its benchmark policy rate, fixed mortgage rates increase. 

On the other hand, if the economy is weak and the BoC needs to reduce rates to cool the economy, a decrease in fixed mortgage rates will likely follow.

Economic factors impacting fixed mortgage rates include inflation, the housing market, and the lender’s profit margin, known as the lender’s funding costs. Inflation can cause interest rates to rise. In contrast, a strong housing market can cause interest rates to fall. The central bank maintains a delicate balance to keep inflation in check, measured through the Consumer Price Index (CPI). Lenders also need to profit so that they may adjust their rates based on their profit margins.

How To Find The Best 3-Year Fixed Mortgage Rates

The first step is to shop around and compare rates from different lenders. You can contact lenders directly or use an online mortgage comparison tool. Or you can skip this step and reach out to nesto; we scanned the market and guarantee our rates are the lowest in the industry.

Consider the annual percentage rate (APR) and the interest rate when comparing rates. The APR includes all of the fees associated with the mortgage to give you a more accurate picture of the total cost of the loan. 

If there are fees involved in your mortgage transaction, ask your mortgage expert what your rate could be if you paid the fees with cash instead of including them in your mortgage balance.  This simple request could save you a considerable amount of money by reducing your interest-carrying costs over the life of your mortgage.

Another way to find the best 3-year fixed mortgage rates is to work with a mortgage broker. A mortgage broker can help you navigate the mortgage process and find the best rates for your situation.  nesto’s mortgage experts are licensed mortgage professionals in multiple provinces, offering you honesty, transparency and expert advice without the commissions that come with an independent mortgage broker.

Tips For Saving Money On A 3-Year Fixed Mortgage

Once you’ve found the best 3-year fixed mortgage rate, there are several ways to save money on your mortgage. 

#1- Make Extra Payments 

You can pay off your mortgage faster and save on interest by making extra payments. Prepayment privileges are usually baked into your rate. So when you get the lowest rate, check that you didn’t give away any of your mortgage features in return.  The lowest rate is not always the best mortgage rate.

#2-  Early Renew Your Mortgage

If interest rates drop significantly during your 3-year fixed term, you can renew your mortgage and get a lower rate.  By blending and extending with a lower rate in the market, you can get a lower weighted average rate. 

#3 – Make A Larger Downpayment

The more you can put down upfront, the less you’ll have to borrow, saving you money on interest over the life of your loan. An insured mortgage with less than a 20% downpayment comes with the best rate, as the lender’s funding costs are the lowest when you pay for your mortgage default insurance. The next best rate is putting down 35% or more as a downpayment.

Alternatives To A 3-year Fixed Mortgage Rate

Several alternatives should be considered if a 3-year fixed mortgage rate needs to be better suited for you. 

One alternative is a variable-rate mortgage, where the interest rate can fluctuate based on market conditions while your payment doesn’t change. While this type of mortgage can be riskier,  it can also offer lower rates at most times. 

Another option is an adjustable-rate mortgage, where the interest portion of your mortgage payment fluctuates with your lender’s prime rate. Although this type of mortgage carries similar interest rate risks as the variable-rate mortgage, it does not over-amortize, causing you to pay your mortgage for longer than scheduled. 

Our 3-year adjustable-rate mortgage is currently priced at at nesto.

The Rise Of 3-Year Fixed Mortgage Rates In 2023

Since April 2023, 3-year fixed rates have been lower than 1-year or 2-year fixed rates. Currently, 3-year fixed rates are also lower than 5-year fixed rates.

This makes the 3-year fixed-term mortgage a sweet spot between a variable rate and a 5-year fixed-term mortgage. 

But why is it the sweet spot? We’ll have to look at the relationship that bonds have on fixed mortgage rates being priced on the expectation of bond prices in the future.

Compared to bonds with a longer maturity that locks in higher rates for a longer period of time, short and medium-term bonds are less vulnerable to rate hikes. However, compared to longer-term bonds, short-term bonds offer less potential for income generation.

Although 3 years is considered a shorter-term rate, a 3-year fixed term offers longer-term stability in rates with less risk than a 4 or 5-year term. Nevertheless, if interest rates drop within the first 1-3 years, a 5-year term can leave you at a high rate long after others have snapped up better deals. 

At renewal time, breaking a 5-year mortgage can cost upwards of $10,000 more in discharge penalties, so the 3-year term provides more flexibility if rates take a turn for the better. 

With this in mind, opting for a 3-year fixed-rate mortgage could save you more while providing the stability you need from a predictable mortgage payment. If you’re a first-time homebuyer (FTHB), the current 3-year fixed mortgage rate could help you qualify for a slightly bigger mortgage.

Historical 3-Year Fixed Mortgage Rates

The chart below shows the Bank of Canada’s historical 3-year fixed mortgage rates since 1980.

How are 3-year fixed mortgage rates determined?

Bond yields directly influence fixed-rate mortgages, meaning a 3-year fixed-rate mortgage will closely follow the movement of 3-year bond yields.

The bond market significantly impacts fixed mortgage rates in Canada, as banks use it to determine their mortgage rates. Banks use investments like mortgages and Government of Canada bonds to make profits, but the two have significant differences. Bonds provide a no-risk opportunity for banks, guaranteeing at least a minimal profit while requiring no upfront cost. On the other hand, lending money for a mortgage carries a much higher risk for banks, involving costs for approval and setup, and there is no guaranteed profit. Banks calculate fixed mortgage rates based on the interest rates they’re receiving from their investments in bonds. 

The spread is the difference between your fixed mortgage rate and the bond price. The spread or markup between fixed mortgage rates and bond yields can vary, either widening or narrowing, depending on various economic factors. These factors include the banks’ assessment of future risks such as mortgage defaults, origination and servicing costs, as well as their profits. Their profit is limited to the supply and demand of money and, therefore, liquidity in the market. Charter banks must raise their mortgage rates reasonably to remain competitive.

Lenders compete for your mortgage business, so the spread between rates is inconsistent across all of them. Each lender determines their bottom line and may lower rates further if they have the flexibility. Charter banks, which offer a range of investment products, lack the flexibility to offer lower rates. Therefore, a more profitable bond market with higher bond yield will usher lower rates on your fixed mortgage. 

Lenders are quicker to raise their fixed mortgage rates and slower to lower them as bond yields fluctuate. That’s because they want to ensure their costs cover their risks during periods of volatility in the bond market.

How are bond prices determined?

Let’s use a hypothetical example of a 3-year bond with a 3.5% coupon rate to understand how bond prices are determined. When the overall market interest rate rises from 3.5% to 4%, newly issued 3-year bonds will have higher yields. A higher yield on newly issued 3-year bonds makes existing 3.5% 3-year bonds less appealing, and their prices decrease. These lower-yielding 3-year bonds would need to be sold at a discounted price to entice investors.

On the other hand, if the market interest rate falls from 4% to 3.5%, the 4% coupon bond becomes more attractive compared to newly issued 3-year bonds. As a result, its price increases, and it would be sold at a premium. Buyers would need to offer a higher price to compensate sellers for giving up the opportunity for higher yields on their 3-year bonds.

The relationship between bond prices and yields is inverse: bond prices drop to attract buyers when yields go up. Conversely, when yields go down, bond prices rise to compensate sellers for giving up higher yields on their bonds. 

How much do lenders make on their 3-year fixed mortgages?

This chart illustrates the spread between the 3-year bond yield and the corresponding 3-year fixed mortgage rate.  It also shows the difference in mortgage pricing between nesto’s insured and the comparable average insured rate from Canada’s big banks. We’re tracking this movement from the 1-year anniversary of the current rate tightening cycle started in March 2022 by the Bank of Canada.

Note: The average rate is calculated based on the posted rates of the 6 biggest lenders in Canada that together make up over 70% of the retail mortgage market in the country. These 6 biggest lenders are the chartered banks: Toronto-Dominion Canada Trust (TD), Royal Bank of Canada (RBC), Bank of Montréal (BMO), Bank of Nova Scotia (BNS), Canadian Imperial Bank of Commerce (CIBC) and National Bank of Canada (NBC).

What drives changes in 3-year fixed mortgage rates?

3-year fixed mortgage rates follow the yields on 3-year government bonds. Fixed mortgage rates are priced according to government bond yields with a spread to account for the profit from the lender issuing the fixed-rate mortgage. 

These bond yields are influenced by economic conditions, with the spread between bond yields and lender rates varying according to a lender’s funding costs and market conditions.

Lenders use Government of Canada bonds to secure fixed mortgages, meaning that the yield from these bonds is the main factor determining fixed mortgage rates. If bond yields increase, funding mortgages becomes more expensive for lenders. To compensate, lenders raise their rates to continue making a profit.

Compensation for lenders’ funding costs explains why fixed mortgage rates are always higher than current bond yields, with the underlying spread changing with bond market fluctuations. 

External factors such as inflation, employment and exports won’t affect your fixed rate once locked in, but they could influence the uptake of new 3-year fixed mortgage rates.

Learn About Rates & Mortgages

Welcome to our Frequently-Asked Questions (FAQ) section, where we answer the most popular questions our nesto mortgage advisors receive daily, designed to help you make informed mortgage decisions whenever you need a new mortgage or renew/refinance an existing one.

On the hunt to learn more about 3-year fixed-rate mortgages? Here are some of Canadians’ most commonly asked questions in 2024 about this hugely popular mortgage term.

Can I refinance my 3-year fixed mortgage?

Yes, you can refinance your 3-year fixed mortgage if you find a better rate or want to change the terms of your loan, such as increasing the balance (buy money) or amortization (buy time).

What happens at the end of a 3-year fixed mortgage term?

At the end of a 3-year fixed mortgage term, your mortgage will come up for renewal, and your lender will offer rates based on current market conditions. If interest rates have risen during that time, your payments could increase.

What is a 3-year fixed mortgage rate?

A 3-year fixed mortgage rate is a fixed rate with a static payment fixed for 3 years. A mortgage comprises multiple mortgage terms – referred to as the amortization period. The amortization period typically comprises 25 to 30 years at the start of your mortgage. Today’s 3-year fixed mortgage rate at nesto is .

What are the differences between fixed and variable rates?

A fixed mortgage rate remains the same throughout your fixed mortgage term, whereas in a variable mortgage, the interest rate will fluctuate depending on changes to your lender’s prime rate. A 3-year fixed mortgage payment benefits from predictability and stability, given that mortgage payments always remain the same throughout the 3-year term. Additionally, variable interest rate mortgages are compounded more often (12 times a year) versus only twice yearly.

On Wednesday, April 17, 2024, nesto’s 3-year fixed rate is , and the 3-year variable rate is .  The discount between nesto’s 3-year adjustable rate and our prime rate at is the discount that will carry over on a 3-year adjustable-rate mortgage (ARM) regardless of the direction of the prime rate.

Why compare 3-year fixed rates with nesto?

At nesto, we want to make finding the right mortgage loan quicker and easier. We’ll show you the best 3-year fixed mortgage rates in Canada, saving you time and money. On top of this, our mortgage experts are professionally qualified, holding designations in multiple provinces, giving you top-notch advice – with a side of the lowest rates without negotiation.

How do I lock in my 3-year fixed mortgage rate?

A 3-year mortgage rate hold allows you to lock in a rate. Once qualified, the lender will issue you a mortgage commitment to hold a 3-year fixed rate for your mortgage. Depending on the rate offered, lenders will hold your rate for some time – typically 60 to 120 days. At nesto, we can hold your rate for up to 150 days, pending your qualifying on your mortgage.

If you’ve found a 3-year fixed mortgage rate that you like, the next thing to do is consult a mortgage expert to see if this fixed rate suits your situation. The mortgage advisor will guide you to understand your needs and goals. 

They will explain all the restrictions, features and benefits and complete a cost analysis to see if locking into a new rate and term makes sense for your current financial situation. Our mortgage will provide you with tailored advice for your unique needs.

How nesto works

At nesto, all of our commission-free mortgage experts hold concurrent professional designations from one or more provinces. Our clients will receive the best advice and care when they speak with specialists that exceed the industry status quo. 

Unlike the industry norm, our agents are not commissioned but salaried employees. This means you’ll get free, unbiased advice on the most suitable mortgage solution for your unique needs. Our advisors are measured on the satisfaction and quality of advice they provide to their clients. 

nesto is working hard to change how the mortgage industry functions. We start with honest and transparent advice, followed by our best rates upfront. We can offer you these low rates using the fintech industry’s best-in-class and safest technology to provide a 100% digital online experience and process to reduce overhead costs.

By working remotely across Canada, all our mortgage experts and staff spend less time commuting to work and more time with their friends and family. This makes for more dedicated employees and contributes to our success with happy and satisfied clients.

nesto is on a mission to offer a positive, empowering and transparent property financing experience, simplified from start to finish.

Reach out to our licensed and knowledgeable mortgage experts to find your best mortgage rate in Canada.

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