Why is the insured mortgage rate lower than the uninsured rate?

Insured mortgages carry default insurance, usually because the down payment is under 20%, so the lender takes on less credit risk and can price the loan lower. Insurable and uninsurable mortgages, including most refinances, homes over $1 million and amortizations beyond 25 years, generally price higher. In August 2026 the gap between the lowest insured and lowest conventional 5-year fixed rate was roughly 0.10 percentage points.

Is a variable rate cheaper than a fixed rate in August 2026?

On advertised rates, yes: the lowest insured 5-year variable near 3.35% was below the lowest insured 5-year fixed near 3.94%. But a variable rate moves with lender prime, which was 4.45% at Canada's big banks in early August 2026 and changes when the Bank of Canada changes its policy rate. A lower starting rate is not the same as a lower cost over the full term, so borrowers should test payment scenarios rather than assume.

Best Mortgage Rates in Canada — August 2026 Comparison

Q: What is the best mortgage rate in Canada right now (August 2026)?

Public comparison tables on August 7-8, 2026 showed the lowest advertised insured 5-year fixed rate near 3.94%, the lowest insured 3-year fixed near 3.89%, the lowest insured 2-year fixed near 3.94% and the lowest insured 5-year variable near 3.35%. On the uninsured (conventional) side, the lowest 5-year fixed was near 4.04% and the lowest 5-year variable near 3.40%. These are advertised lowest-in-market figures for well-qualified borrowers and are not offers or guarantees.

Q: Will the Bank of Canada change rates in September 2026?

The Bank of Canada held its target for the overnight rate at 2.25% on July 15, 2026, its sixth consecutive hold, and the next scheduled announcement is September 2, 2026. Published commentary in early August 2026 leaned heavily toward another hold, with inflation near 2.8% and the labour market firm. Forecasts are not guarantees and can change with new inflation, jobs and trade data.

Q: Does the lowest advertised rate mean I will be approved at that rate?

No. Advertised lowest-in-market rates typically assume a strong credit profile, verifiable income, an owner-occupied property, a standard amortization and a specific insurance status. Your approved rate depends on lender criteria and your full application. Always compare the full product, including penalties, prepayment privileges, portability and fees, not just the headline number.

Quick takeaway: As of August 7–8, 2026, public rate tables showed a lowest insured 5-year fixed near 3.94%, a lowest insured 3-year fixed near 3.89% and a lowest insured 5-year variable near 3.35%. Conventional (uninsured) pricing sat slightly higher, around 4.04% for a 5-year fixed. Big-bank prime was 4.45% and the Bank of Canada's overnight rate was 2.25% after six straight holds, with the next decision scheduled for September 2, 2026. Advertised lowest-in-market rates are benchmarks for well-qualified borrowers, not approvals.

3.94%Lowest advertised insured 5-year fixed rate in public tables, August 7, 2026.

3.35%Lowest advertised insured 5-year variable rate in the same tables.

4.45%Prime rate at Canada's major banks as of August 8, 2026.

2.25%Bank of Canada target overnight rate, held for a sixth consecutive decision on July 15, 2026.

August 2026 lowest advertised rates at a glance

The table below summarizes lowest-in-market advertised rates reported by public Canadian comparison sites in the first week of August 2026. They are national low points collected from dozens of lenders and brokerages, so most borrowers will be quoted something different.

Term	Lowest insured (Aug 7, 2026)	Lowest conventional / uninsured	Recent direction
2-year fixed	~3.94%	Higher, varies by lender	Down about 5 bps over 30 days
3-year fixed	~3.89%	~4.09%	Down about 10 bps over 30 days
5-year fixed	~3.94%	~4.04%	Insured down slightly; conventional up about 5 bps over 30 days
5-year variable	~3.35%	~3.40%	Essentially flat while the Bank of Canada holds

Figures are rounded public benchmarks as of August 7–8, 2026 and change frequently. Some comparison sites listed a lowest insured 5-year fixed of 3.94% while others showed 4.04%, which is normal because panels of lenders and eligibility rules differ.

Why the "best rate" depends on your mortgage category

In Canada, the single biggest driver of the rate you are offered — after credit and income — is which pricing bucket your mortgage falls into:

Insured: typically less than 20% down with default insurance in place. Lowest risk to the lender, so it usually gets the lowest advertised rate.
Insurable: 20% or more down, property under $1 million, amortization 25 years or less. Priced slightly above insured.
Uninsurable / conventional: most refinances, properties over $1 million, or amortizations beyond 25 years. Priced higher again.
Rental and investment: generally the highest pricing of the four.

This is why a neighbour's 3.94% and your 4.39% quote can both be legitimate on the same day. When you compare current Canadian mortgage rates, make sure you are comparing the same category, term and amortization.

Fixed or variable in August 2026?

Advertised variable rates were roughly 0.55 to 0.65 percentage points below comparable 5-year fixed rates in early August 2026. That gap is the trade-off: variable buys a lower starting rate in exchange for accepting that prime, and therefore your rate, can move.

Fixed rates are priced off Government of Canada bond yields. The 5-year yield sat near 3.2% in early August 2026, which is why fixed pricing has been drifting rather than falling sharply.
Variable rates are priced as a discount to prime (4.45%). They stay put while the Bank of Canada holds, and move the day prime moves.

Published forecasts in early August 2026 mostly expected the Bank of Canada to hold at 2.25% through the fall, with several bank economists penciling in modest increases in 2027. Nothing about that is certain, so the practical step is to model both paths with the mortgage payment calculator: your payment at today's fixed quote, and your payment if a variable rate rose by 0.50% to 1.00%.

If you are renewing rather than buying

Renewal pricing is its own market. Your existing lender's renewal letter is an offer, not the market's best number, and lenders do not always lead with their sharpest rate for clients they expect to stay. Compare that letter against current mortgage renewal rates at least four to six months before maturity, and factor in switch costs such as discharge, appraisal or legal fees, which some lenders cover on a straight switch.

A rate that is 0.40% lower on a $500,000 balance is meaningful over a five-year term, but only after you confirm the product is comparable: same term length, same prepayment privileges, same penalty calculation and no unusual restrictions on breaking early.

See what you actually qualify for

Advertised low rates are a starting point. RateShop can help you compare current purchase, renewal and refinance options side by side across multiple lenders, based on your real numbers rather than a table's best-case borrower.

Start a mortgage rate comparison

How to compare mortgage rates properly

Identify your category first: purchase or renewal or refinance, and insured, insurable or uninsurable.
Compare like for like — same term, same amortization, same mortgage amount.
Look at the penalty calculation. Big-bank interest rate differential penalties can cost thousands more than a monoline lender's.
Check prepayment privileges (often 10/10 to 20/20) and whether the mortgage is portable and assumable.
Ask what fees are covered on a switch, and whether a cashback offer is paid back if you break early.
Confirm the rate hold period and what happens if rates move before closing.
Run the payment at the quoted rate and at a higher stress-case rate before committing.

Rate disclaimer

All rates, yields and market figures on this page are general educational information gathered from public sources on or about August 8, 2026 and may be out of date, incomplete or superseded without notice. RateShop does not guarantee any rate, approval or product availability. Actual mortgage rates depend on lender criteria, credit profile, verified income, property type and value, mortgage purpose, down payment or equity, insurance status, amortization and documentation. This page does not provide personalized mortgage, legal, tax or financial advice. Speak with a licensed mortgage professional about your own situation.

Frequently asked questions

What is the best mortgage rate in Canada right now (August 2026)?

Public tables on August 7–8, 2026 showed a lowest advertised insured 5-year fixed near 3.94%, 3-year fixed near 3.89%, 2-year fixed near 3.94% and 5-year variable near 3.35%. Conventional pricing was near 4.04% for a 5-year fixed and 3.40% for a 5-year variable. These are lowest-in-market figures for well-qualified borrowers, not offers.

Why is the insured rate lower than the uninsured rate?

Insured mortgages carry default insurance, usually because the down payment is under 20%, so the lender's risk is lower and pricing is sharper. Refinances, homes over $1 million and longer amortizations are typically uninsurable and price higher. In August 2026 that gap on a 5-year fixed was roughly 0.10 percentage points.

Is variable cheaper than fixed in August 2026?

On advertised rates, variable started lower — about 3.35% insured versus 3.94% fixed. But variable moves with prime (4.45% in early August 2026), which changes when the Bank of Canada moves. A lower starting rate is not automatically a lower total cost. Compare scenarios with the mortgage payment calculator.

Will the Bank of Canada change rates in September 2026?

The Bank held at 2.25% on July 15, 2026 for a sixth consecutive decision, and the next scheduled announcement is September 2, 2026. Public commentary in early August leaned toward another hold given inflation near 2.8% and a firm labour market. Forecasts are not guarantees.

Does the lowest advertised rate mean I will be approved at that rate?

No. Advertised rates assume a strong credit profile, verifiable income, an owner-occupied property, standard amortization and a specific insurance status. Your approved rate depends on your full application. Compare the whole product — penalties, prepayment privileges, portability and fees — alongside current mortgage rates and renewal rates.

Best mortgage rates in Canada: August 2026 comparison