Where rates stand in November 2026
The Bank of Canada held its policy rate at 2.25% at its September decision, then raised it by 25 basis points to 2.50% on 28 October 2026. CPI inflation has run around 3% since April, pushed up by high energy prices linked to the conflict in the Middle East; the Bank expects about 3½% by year-end and said further increases could be needed. The next decision is on 9 December 2026. Prime rose to 4.70%, so variable rates moved up the same day; on 2 November 2026 the lowest 5-year variable on Ratehub.ca was 3.68% and the median 3.95%. Fixed rates follow 5-year Government of Canada bond yields, which had already climbed: the cheapest 5-year fixed was 4.44% and the median 4.94%.
Fixed vs variable on a $500,000 mortgage
| Option | Rate | Monthly (25 yrs) | Interest over 5 yrs | Stress-test rate |
|---|---|---|---|---|
| Typical 5-yr fixed | 4.94% | $2,891 | $115,600 | 6.94% |
| Typical 5-yr variable (prime − 0.75) | 3.95% | $2,625 | $92,700 | 5.95% |
| Variable if prime +1 pt now | 4.95% | $2,908 | $117,100 | — |
| Variable, prime +0.25 every 6 mo to +1.00 | 4.95% | — | $110,500 | — |
Fixed uses semi-annual compounding; variable uses monthly compounding. The ramp scenario recalculates the payment after each change (adjustable-rate style).
Break-even: if prime rose by about 0.94 points right away and stayed there, the variable would cost the same five-year interest as the 4.94% fixed. A gradual rise of 0.25 points every six months for two years (to 4.95%) would cost $110,500 of interest versus $115,600 for the fixed.
Variable vs adjustable: know which you have
- Adjustable-rate mortgage (ARM) — the payment changes every time prime moves.
- Variable-rate mortgage with fixed payments (VRM) — the payment stays the same while more of it goes to interest. If rates rise far enough you can hit a “trigger rate”, as many borrowers did in 2022–2023.
Penalties: the hidden difference
Breaking a variable mortgage usually costs three months’ interest — about $4,900 on $500,000. Breaking a fixed costs the greater of three months’ interest or the interest-rate differential (IRD), which at big banks is calculated against posted rates and can be far higher. If there is any chance you will sell, refinance or move within five years, that flexibility has real value.
Stress test: variable qualifies more easily
Because the qualifying rate is contract + 2, a variable qualifies at 5.95% versus 6.94% for the fixed. On a $500,000 loan that lowers the qualifying payment from $3,484 to $3,184.
Which should you choose in 2026?
This is general information, not a forecast or advice; nobody can reliably predict where rates will go.
FAQ
Is fixed or variable better in Canada right now?
In November 2026 a typical variable (3.95%) is about one point below a typical 5-year fixed (4.94%). The variable is cheaper over five years unless prime rises by more than about 0.94 points on average; the Bank of Canada raised rates in October 2026 and said more increases could be needed.
What is the Bank of Canada rate now?
2.50%, after a 25 basis point increase on 28 October 2026. The next scheduled decision is 9 December 2026.
What is the prime rate in Canada?
4.70% at the big banks from 29 October 2026.
How much is the penalty to break a variable mortgage?
Usually three months’ interest, about $4,900 on a $500,000 balance at 3.95%. Fixed mortgages charge the greater of three months’ interest or the interest-rate differential.
Which is easier to qualify for, fixed or variable?
Variable, because the stress test uses contract rate + 2: 5.95% for a 3.95% variable versus 6.94% for a 4.94% fixed.
Related mortgage articles
Assumptions & sources
- Bank of Canada raised the target for the overnight rate by 25 basis points to 2.50% on 28 October 2026 (Bank Rate 2.75%, deposit rate 2.45%); next decision 9 December 2026. Big-bank prime rose to 4.70% on 29 October 2026.
- Typical rates: 4.94% 5-year fixed and 3.95% 5-year variable are the median of the 17 lenders listed in Ratehub.ca’s rate tables updated 2 November 2026 (fixed range 4.44%–5.99%, variable 3.68%–4.70%). Insured (high-ratio) mortgages often get slightly lower rates than uninsured ones.
- Fixed-rate payments use Canadian semi-annual compounding (Interest Act); variable-rate payments use monthly compounding, which most lenders apply to variable mortgages. Rates are assumed constant for the whole amortization.
- CMHC homeowner premiums on the loan amount: 4.00% above 90% loan-to-value, 3.10% for 85.01–90%, 2.80% for 80.01–85%, plus 0.20% for amortizations over 25 years. Provincial sales tax on the premium in Ontario (8%), Quebec (9%) and Saskatchewan (6%) must be paid in cash at closing.
- Minimum down payment (Department of Finance rules from 15 December 2024): 5% of the first $500,000, 10% of the portion from $500,000 to $1.5 million; 20% at $1.5 million or more, where default insurance is not available. 30-year insured amortizations: first-time buyers and buyers of new builds.
- Stress test: qualify at the greater of 5.25% or the contract rate + 2 points (OSFI Guideline B-20; the same floor applies to insured loans). Income needed uses CMHC’s 39% GDS / 44% TDS limits, property tax of 1% of the price a year and $100/month heating. Take-home pay: 2026 Ontario, from our Canada salary after tax engine.
- National average price: CREA, September 2026 ($666,538, −1.6% year over year).