Bank of Canada Paused the Policy Rate at 2.25%
Best Variable Mortgage Rates in Canada
Today’s Best Variable Rates. Last updated June 22, 2026
Variable and adjustable mortgage rates in Canada track your lender’s prime rate, which follows the Bank of Canada’s policy rate, so a variable rate changes whenever the Bank moves its overnight rate. Variable rates do not track changes in Government of Canada (GoC) bond yields, unlike fixed rates.
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*Insured loans. Other conditions apply. Rates in effect as of today (Monday, June 22, 2026).
Current Variable Mortgage Rates in Canada
National Variable Mortgage Rate Trends for Today
For Monday, June 22, 2026:
Canada’s average 3-year conventional variable and adjustable mortgage rates are
Canada’s average 5-year conventional variable and adjustable mortgage rates are
Note: one basis point is 1/100th of a percentage point, or 0.01%.
What are the average variable mortgage rates in Canada today?
As of Monday, June 22, 2026, the following are the average conventional variable and adjustable rates across Canada, offered to borrowers putting 20% or more down. Conventional rates are generally higher than high-ratio rates but do not require mortgage default insurance.
- 3-year variable mortgage rate:
5.00% - 5-year variable mortgage rate:
4.16%
What are the lowest variable mortgage rates in Canada today?
As of Monday, June 22, 2026, high-ratio variable rates, offered to borrowers with a down payment of less than 20% who carry mortgage default insurance, are the lowest available. The following high-ratio variable rates from nesto are accessible across Canada:
- 3-year variable insured mortgage rate: 3.60%
- 5-year variable insured mortgage rate: 3.40%
How Variable Mortgage Rates Work in Canada
Variable and adjustable mortgage rates in Canada are priced off your lender’s prime rate, which moves with the Bank of Canada’s policy (overnight) rate. When the Bank changes its policy rate at one of its eight scheduled decisions a year, the prime rate moves within days, and your variable mortgage moves with it.
Prime currently sits at 4.45%, with the Bank of Canada policy rate at 2.25%, and a variable rate is usually quoted as prime minus a discount, or less often plus a premium, which stays fixed for your term. As the mirror concept of fixed rates, variable and adjustable rates are directly influenced by the Bank of Canada’s decisions, while fixed rates follow the Government of Canada (GoC) bond yields.
Variable mortgage popularity swings with its exposure to policy rate changes. Variable and adjustable mortgages climbed from about 24% of newly extended mortgages at chartered banks in August 2025 to roughly 42% by February 2026, according to CMHC’s Spring 2026 Residential Mortgage Industry Report. This is after variable rates fell below fixed rates at the country’s major banks for the first time since 2022.
nesto’s own application data shows how quickly that interest cools into caution. Variable intent ran as high as 71% of applicants at the application stage, the strongest in 17 months, while only about 34% chose a variable mortgage at signing (nesto application data, April 2026). Borrowers often want variable rates, then choose certainty once they understand the rate environment and the risks involved.
VRM vs ARM: The Two Types of Variable Mortgage
Every variable mortgage moves with prime, but variable mortgages are split into two structures that behave very differently when rates change, and choosing the right one matters more than most borrowers realize.
A variable-rate mortgage (VRM) keeps your monthly payment fixed while allowing the split between interest and principal to vary. An adjustable-rate mortgage (ARM) adjusts the interest component of your payment each time the prime rate changes. Both are commonly called variable mortgages.
| How They Compare | VRM (fixed payment) | ARM (fluctuating payment) |
|---|---|---|
| Your monthly payment when rates change | Stays the same | Rises or falls with prime |
| What absorbs the rate change | The split between interest and principal | The interest component of your payment |
| Amortization | Can lengthen if rates rise, or shorten if they fall | Stays on schedule |
| Trigger-rate risk | Yes, the payment can stop covering interest | No |
| In a rate-cut cycle | Pays down principal faster | Payment falls right away |
| Often suited to | Income properties and payment stability | Paying off a primary residence faster |
The VRM trade-off shows up in a rising-rate environment: since its payment is fixed, a higher rate sends more of each payment to interest and less to principal, which can stretch your amortization and lead to a payment increase at renewal. The ARM trade-off is the reverse: your payment moves immediately, up or down, so there is no change in amortization, but no shelter from a rate hike either.
Trigger Rates and Trigger Points
A VRM reaches its trigger rate when the fixed payment no longer covers the interest, so no principal is being paid down. Past that point, if the mortgage balance exceeds the original borrowed amount, the mortgage reaches its trigger point.
Negative amortization occurs when the mortgage amortization exceeds its contractually required amortization at the start of the loan, as unpaid interest is added to the mortgage principal. An ARM does not have this risk because its monthly payment always adjusts to cover changes in the interest component.
Lenders may require you to remedy negative amortization of your variable-rate mortgage (VRM) if it has reached its trigger rate, for example, by increasing the monthly payment or making a lump-sum payment to reduce its balance, or possibly both.
The Flexibility Advantages of a Variable Rate
A variable rate is usually cheaper to leave than a fixed rate. The penalty for breaking a variable or adjustable mortgage is typically three months’ interest, while the penalty for breaking a fixed-rate mortgage is the greater of three months’ interest or the interest rate differential (IRD), which can be far larger. If there is a chance you will sell, refinance, or restructure before your term ends, that lower break cost has real, measurable consequences.
Most variable mortgages also let you convert to a fixed rate during the term without breaking the mortgage. Mortgage conversion is a standard option available with most lenders. If rising rates start to worry you, you can convert your variable or adjustable mortgage into a fixed rate. However, converting from a fixed to a variable mortgage usually requires a full break penalty.
Who Should Choose a Variable Rate?
A variable rate rewards you if rates fall or stay low and costs more if they rise, so it suits borrowers who can absorb that volatility rather than those betting on a particular rate path. Anyone choosing a variable mortgage should be comfortable with a changing payment (ARM) or amortization (VRM).
For borrowers choosing variable or adjustable mortgages, it’s recommended that they have the financial capacity to handle a meaningful rate increase, ideally 100 to 200 basis points, without strain. An adjustable or variable mortgage is not well-suited for borrowers already stretched to their qualifying limit, those with volatile income and no buffer, or anyone who needs a predictable payment for peace of mind. For them, a fixed rate is usually the better choice. The deciding factor is your financial cushion and unique needs, not the forecast for mortgage rates.
You can compare today’s pricing on nesto’s 3-year variable and 5-year variable terms, and weigh the choice with a nesto mortgage expert who can model how interest rate changes could affect your payment.
Bank of Canada Policy Rate Changes
| Date of Rate Change | Key Overnight Target Rate (%) | Change (%) | Bank Prime Rate |
|---|---|---|---|
| June 2, 2010 | 0.30% | 0.25% | 2.50% |
| July 21, 2010 | 0.55% | 0.25% | 2.75% |
| September 9, 2010 | 0.80% | 0.25% | 3.00% |
| January 28, 2015 | 0.65% | -0.15% | 2.85% |
| July 16, 2015 | 0.50% | -0.15% | 2.70% |
| July 13, 2017 | 0.75% | 0.25% | 2.95% |
| September 7, 2017 | 1.00% | 0.25% | 3.20% |
| January 18, 2018 | 1.25% | 0.25% | 3.45% |
| July 12, 2018 | 1.50% | 0.25% | 3.70% |
| October 25, 2018 | 1.75% | 0.25% | 3.95% |
| March 5, 2020 | 1.25% | -0.50% | 3.45% |
| March 17, 2020 | 0.75% | -0.50% | 2.95% |
| March 30, 2020 | 0.25% | -0.50% | 2.45% |
| March 3, 2022 | 0.50% | 0.25% | 2.70% |
| April 14, 2022 | 1.00% | 0.50% | 3.20% |
| June 2, 2022 | 1.50% | 0.50% | 3.70% |
| July 14, 2022 | 2.50% | 1.00% | 4.70% |
| September 7, 2022 | 3.25% | 0.75% | 5.45% |
| October 26, 2022 | 3.75% | 0.50% | 5.95% |
| December 7, 2022 | 4.25% | 0.50% | 6.45% |
| January 25, 2023 | 4.50% | 0.25% | 6.70% |
| March 8, 2023 | 4.50% | 0.00% | 6.70% |
| April 12, 2023 | 4.50% | 0.00% | 6.70% |
| June 7, 2023 | 4.75% | 0.25% | 6.95% |
| July 12, 2023 | 5.00% | 0.25% | 7.20% |
| September 6, 2023 | 5.00% | 0.00% | 7.20% |
| October 25, 2023 | 5.00% | 0.00% | 7.20% |
| December 6, 2023 | 5.00% | 0.00% | 7.20% |
| January 24, 2024 | 5.00% | 0.00% | 7.20% |
| March 6, 2024 | 5.00% | 0.00% | 7.20% |
| April 10, 2024 | 5.00% | 0.00% | 7.20% |
| June 5, 2024 | 4.75% | -0.25% | 6.95% |
| July 24, 2024 | 4.50% | -0.25% | 6.70% |
| September 4, 2024 | 4.25% | -0.25% | 6.45% |
| October 23, 2024 | 3.75% | -0.50% | 5.95% |
| December 11, 2024 | 3.25% | -0.50% | 5.45% |
| January 29, 2025 | 3.00% | -0.25% | 5.20% |
| March 12, 2025 | 2.75% | -0.25% | 4.95% |
| April 16, 2025 | 2.75% | 0.00% | 4.95% |
| June 4, 2025 | 2.75% | 0.00% | 4.95% |
| July 30, 2025 | 2.75% | 0.00% | 4.95% |
| September 17, 2025 | 2.50% | -0.25% | 4.70% |
| October 29, 2025 | 2.25% | -0.25% | 4.45% |
| December 10, 2025 | 2.25% | 0.00% | 4.45% |
| January 28, 2026 | 2.25% | 0.00% | 4.45% |
| March 18, 2026 | 2.25% | 0.00% | 4.45% |
| April 29, 2026 | 2.25% | 0.00% | 4.45% |
| June 10, 2026 | 2.25% | 0.00% | 4.45% |
Learn About Variable Mortgage Rates
Find below the most common questions Canadians ask about variable mortgage rates.
How do variable mortgage rates relate to the prime rate?
A variable or adjustable mortgage rate moves with your lender’s prime rate, which tracks the Bank of Canada’s policy rate, throughout your term. The Bank sets its policy rate at eight scheduled decisions a year, and lenders add a spread (currently 2.20%) to it to set their prime rate. Your variable rate is then quoted as the prime rate minus a discount or plus a premium, which stays fixed for the term.
How are variable mortgage rates determined?
Variable mortgage rates are set by the policy rate, or target for the overnight rate, set by the Bank of Canada. Every lender uses the policy rate to set its prime rate, and because variable rates move with the prime rate, there is a direct link between the Bank of Canada’s decisions and your variable rate.
Lenders often offer a discount off prime to compete for your business. Once you sign, your discount or premium is fixed for the term, so when the prime rate changes, your rate changes by the same amount, keeping the gap to prime constant.
What is a trigger rate on a variable mortgage?
A trigger rate applies to a fixed-payment variable mortgage (VRM) and is the rate at which your set payment no longer covers the interest you owe. Past it, no principal is paid down, and if the balance exceeds the original amount, you reach the trigger point, at which your lender requires a change. You can get ahead of it by increasing your payment or making a prepayment. An adjustable-rate mortgage (ARM) has no trigger rate, since its payment always adjusts with the prime rate.
Which variable mortgage is more suitable for me, an ARM or a VRM?
It depends on whether you want a steady payment or steady amortization. A VRM keeps your payment fixed, which suits borrowers who value payment stability and income property owners who prioritize interest-cost deductibility for income tax purposes, but it carries trigger-rate risk if rates rise.
An ARM moves your monthly payment with the prime rate, which helps you pay off a mortgage on schedule and avoid trigger-rate risk, at the cost of a payment that can rise. As a rule of thumb, a VRM tends to fit a rate-hike cycle and an ARM a rate-cut cycle.
Is a variable rate better than a fixed rate?
Neither is better for everyone’s unique financial circumstances. A variable rate can cost less if rates fall or hold, and lets you break or convert more cheaply, while a fixed rate offers a monthly payment that never changes over the term. Variable mortgages have been more cost-effective historically on average, but the right choice depends on how much room your budget has to absorb a payment increase and your comfort with risk, not on a rate prediction. A first-time homebuyer (FTHB) adjusting to new housing costs may value the stability of a fixed rate for a first term.
How do I convert my variable mortgage to a fixed rate?
Most variable mortgages include a convertibility feature that lets you lock into a fixed rate for a new term or the remainder of your current one, without breaking the mortgage. Before converting, weigh the fixed rate on offer against the certainty you gain, and confirm your lender’s restrictions. A nesto mortgage expert can run a quick cost analysis so the switch does not cost you flexibility you will want later.
Can I break a variable mortgage early?
Yes, you can break a variable mortgage early, and it usually costs less than breaking a fixed mortgage. The penalty on a variable rate is typically three months’ interest, rather than the larger interest-rate differential that often applies to fixed mortgages. Estimate your prepayment cost before deciding with nesto’s mortgage penalty calculator.
Why Choose nesto
At nesto, our commission-free mortgage experts, certified in multiple provinces, provide exceptional advice and service that exceeds industry standards. Our mortgage experts are salaried employees who provide impartial guidance on mortgage options tailored to your needs and are evaluated based on client satisfaction and the quality of their advice. nesto aims to transform the mortgage industry by providing honest advice and competitive rates through a 100% digital, transparent, and seamless process.
nesto is on a mission to offer a positive, empowering and transparent property financing experience – simplified from start to finish.
Contact our licensed and knowledgeable mortgage experts to find your best mortgage rate in Canada.