Lowest Mortgage Rates in Canada — August 2026

Q: Why is the insured rate lower than the uninsured rate?

Insured mortgages (those with default insurance from CMHC, Sagen or Canada Guaranty) carry less risk for the lender, so lenders price them lower — often by roughly 0.10% to 0.30% compared with an equivalent conventional mortgage. Default insurance is generally mandatory when the down payment is under 20%, but some borrowers with larger down payments still choose to insure where eligible because the lower rate can outweigh the premium.

Q: Is a 3-year fixed cheaper than a 5-year fixed right now?

Yes, in late August 2026 the lowest advertised 3-year fixed rates were running below comparable 5-year fixed rates by roughly 0.05 to 0.15 percentage points. Shorter terms price off shorter bond yields, which have been lower than longer yields. A 3-year term carries more renewal risk sooner, so the right term depends on your plans, not just the headline rate.

Q: Will the Bank of Canada announcement change these rates?

The Bank of Canada has held its target overnight rate at 2.25% since earlier in 2026, most recently on July 15, 2026, and the next scheduled announcement is September 2, 2026. Variable rates move directly with prime (4.45% at major banks). Fixed rates follow Government of Canada bond yields, which react to inflation and economic data before any Bank of Canada decision. Rate expectations are not guarantees.

Quick takeaway: As of August 21–25, 2026, public Canadian rate tables showed lowest advertised pricing of roughly 3.89%–3.94% on a 3-year fixed, 3.94%–4.09% on a 5-year fixed and about 3.35% on a 5-year variable — typically for insured, high-credit-score borrowers with standard properties. Prime was 4.45%, the Bank of Canada's overnight target was 2.25%, and the next rate announcement is September 2, 2026. July CPI printed at 3.0%, up from 2.8%, which is one reason markets expect continued holds rather than cuts.

~3.89%Lowest advertised insured 3-year fixed in public tables, late August 2026.

~3.94%Lowest advertised insured 5-year fixed over the same period.

4.45%Prime rate at Canada's major banks, unchanged since October 2025.

Sept 2Next scheduled Bank of Canada rate announcement, 2026.

Where the lowest rates sit right now

The figures below are rounded benchmarks drawn from public Canadian comparison sites in the week of August 21–25, 2026. Every lender prices differently, and each site's "lowest" reflects only the lenders on its panel.

Term	Lowest insured	Typical conventional / uninsured	Best suited for
1-year fixed	Higher (~4.5%)	Varies by lender	Short-term flexibility needs
3-year fixed	~3.89%–3.94%	~4.04%+	Sharpest fixed pricing in 2026
5-year fixed	~3.94%	~4.04%–4.09%	Longest payment certainty
5-year variable	~3.35%	~3.40%	Lowest start, moves with prime

Figures are advertised benchmarks, not offers. See live comparisons on our Canada mortgage rates page, including provincial pages for Ontario, BC, Alberta and Quebec.

Why you may not be offered the lowest number on the table

Bottom-of-table rates come with conditions. Lenders reserve their best pricing for mortgages that are easy to fund and easy to sell:

Default insurance. Insured mortgages (down payment under 20%, or voluntarily insured where eligible) usually carry the lowest rates — often 0.10% to 0.30% below conventional equivalents.
Credit score and debt ratios. Strong credit and GDS/TDS comfortably inside limits widen your options.
Property type and location. Standard owner-occupied homes get the best pricing; rentals, rural properties and some condo types are priced up or excluded.
Amortization and size. 25-year amortizations and standard loan sizes fit the best rate buckets; 30-year amortizations and small balances often do not.
Conversion restrictions. Some ultra-low rates limit prepayment privileges or are "no-frills" products. Read the fine print before chasing the headline.

That is why two borrowers can apply to the same lender the same day and receive different quotes. The useful comparison is against offers you can actually qualify for — which is what a broker search is for.

Fixed vs variable at today's spread

In late August 2026 the advertised 5-year variable sat roughly 0.55 to 0.65 percentage points below the lowest 5-year fixed. Variable pricing moves whenever the Bank of Canada moves its policy rate and prime follows; fixed pricing is anchored to Government of Canada bond yields, which trade on inflation expectations — the July CPI uptick to 3.0% is exactly the kind of data that keeps bond yields from falling further. There is no universally correct choice, and this page does not give personalized advice. A practical step is to model both options with your real numbers in the mortgage payment calculator, including a variable scenario 0.50% to 1.00% higher.

See what rate you actually qualify for

Published tables show the market's floor. RateShop helps compare purchase, switch and refinance options across multiple lenders based on your real situation — not a best-case borrower profile.

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Frequently asked questions

What are the lowest mortgage rates in Canada in August 2026?

Public comparison tables in late August 2026 showed lowest advertised rates of roughly 3.89%–3.94% on a 3-year fixed, about 3.94%–4.09% on a 5-year fixed, and about 3.35% on a 5-year variable for well-qualified insured borrowers. These are benchmarks that change frequently and are not offers or guarantees.

Why is the insured rate lower than the uninsured rate?

Insured mortgages carry less risk for the lender, so they are priced lower — often 0.10% to 0.30% below an equivalent conventional mortgage. Insurance is mandatory below a 20% down payment, but some borrowers with larger down payments voluntarily insure where eligible because the rate discount can outweigh the premium over the term.

Is a 3-year fixed cheaper than a 5-year fixed right now?

Yes — in late August 2026 the lowest advertised 3-year fixed rates ran roughly 0.05 to 0.15 percentage points below comparable 5-year fixed pricing. But a 3-year term means facing renewal again sooner, so the right term depends on your plans, not just the headline. Our guide to 3-year vs 5-year fixed rates walks through the trade-off.

Will the Bank of Canada announcement change these rates?

The Bank of Canada held its overnight target at 2.25% on July 15, 2026, and the next announcement is September 2, 2026. Variable rates move with prime (4.45%); fixed rates track bond yields, which react to inflation and jobs data ahead of any decision. Expectations are not guarantees. If you're renewing soon, our renewal rates hub explains how to time a rate hold.

Disclaimer: All rates mentioned are advertised benchmarks gathered from public sources between August 21 and August 25, 2026, rounded, and subject to change without notice. Rates vary by lender, province, property and borrower qualifications, and the lowest advertised rate may not be available to every applicant. This article is general educational information, not financial, legal or mortgage advice, and no rate is guaranteed. Confirm all details directly with a licensed mortgage professional before making decisions.

Sources

Bank of Canada — policy interest rate (2.25% held July 15, 2026; next announcement September 2, 2026): bankofcanada.ca
Bank of Canada — selected Canadian benchmark bond yields, August 2026: bankofcanada.ca
WOWA.ca — Canada mortgage rates snapshot, August 21, 2026 (lowest insured 3-yr fixed 3.89%, 5-yr fixed 3.94%, 5-yr variable 3.35%)
Ratehub.ca — best mortgage rates, as of August 23, 2026 (3-yr fixed 3.94%, 5-yr fixed 4.09%; July CPI 3.0%)
Statistics Canada — Consumer Price Index, July 2026 (headline CPI 3.0%)