Closed mortgage rates can differ considerably by term length. A lender might offer different rates for one-year, three-year and five-year mortgages on the same day, and the relationship between those rates can change as market conditions change. There is no term length that permanently has the lowest closed mortgage rate in Canada. Lenders consider the length of the mortgage term when setting rates, along with factors such as the type of interest, their prime and posted rates, available discounts and the borrower’s credit history.
- How Term Length Affects Closed Mortgage Rates
- 1-Year Closed Mortgage Rates
- 2-Year Closed Mortgage Rates
- 3-Year Closed Mortgage Rates
- 4-Year Closed Mortgage Rates
- 5-Year Closed Mortgage Rates
- Posted Rates and the Rate You Actually Receive Can Be Different
- Fixed and Variable Closed Mortgages Need Separate Rate Comparisons
- Compare the Contract Alongside the Rate
- Questions About Closed Mortgage Rates by Term
How Term Length Affects Closed Mortgage Rates
A mortgage term is the period your current mortgage contract remains in effect. Canadian terms can range from a few months to five years or longer, and you will usually need several terms before completely repaying a mortgage. The length you choose can affect both your interest rate and how soon you return to the lender to renew.
Lenders typically charge higher rates for longer terms, but that pattern does not always hold. Mortgage rates can vary according to the length of the term, which means the actual rates available when you apply are more useful than assuming each additional year will cost more.
The figures below use the Bank of Canada’s September 16, 2026 posted conventional mortgage rates for the six major chartered banks where a comparable benchmark is available. These are posted rates, not necessarily the discounted rate a lender may offer you.
| Term | Bank of Canada posted rate, Sept. 16, 2026 |
|---|---|
| 1 year | 5.49% |
| 2 years | No comparable series published |
| 3 years | 6.05% |
| 4 years | No comparable series published |
| 5 years | 6.09% |
1-Year Closed Mortgage Rates
The posted conventional one-year mortgage rate was 5.49% on September 16, 2026 among Canada’s six major chartered banks.
A one-year term gets you to renewal quickly. If you still have a balance after 12 months, the rate on your next term will depend on what you can negotiate at that time. Mortgage interest rates rise and fall, and your rate is renegotiated when you renew.
That makes the initial one-year rate only part of the cost. You receive a shorter commitment, but you also face another rate decision sooner than you would with a three-year or five-year term.
2-Year Closed Mortgage Rates
Two-year closed mortgages sit between a short one-year commitment and the longer three-year and five-year options. The Bank of Canada’s weekly posted-rate table does not provide an equivalent two-year conventional mortgage series, so there is no directly comparable official two-year figure to add to the September 2026 table above.
Actual two-year rates therefore need to be checked with individual lenders or mortgage brokers. A two-year offer can be higher or lower than neighbouring terms because lenders do not price mortgages according to a fixed rule that makes rates increase with every additional year.
3-Year Closed Mortgage Rates
The posted conventional three-year mortgage rate was 6.05% on September 16, 2026, compared with 5.49% for one year and 6.09% for five years.
A three-year closed term delays renewal for two additional years compared with a one-year mortgage without extending the contract to five years. That difference in renewal timing is important because the term determines how long your current mortgage agreement lasts. Choosing a mortgage term also determines how soon you need to renew.
The September 2026 figures also illustrate why the rates themselves need to be checked rather than predicted from term length. The three-year posted rate was only 0.04 percentage points below the five-year rate at that particular date.
4-Year Closed Mortgage Rates
Four-year closed mortgages provide another middle option, but the Bank of Canada’s weekly series does not publish a corresponding four-year conventional mortgage benchmark.
A lender offering a four-year mortgage will set its own rate for that product. Compare it directly with the three-year and five-year offers available to you rather than estimating where a four-year rate “should” fall between them.
5-Year Closed Mortgage Rates
The posted conventional five-year mortgage rate among the six major chartered banks was 6.09% on September 16, 2026.
A five-year term keeps your mortgage contract in effect longer before scheduled renewal. That can reduce how frequently you need to negotiate a new term, but it also leaves more time for your circumstances to change while you remain under a closed contract.
That distinction matters because a closed mortgage limits penalty-free prepayments according to the contract. The length of the term can also affect the prepayment penalty if you need to break the mortgage early.
Posted Rates and the Rate You Actually Receive Can Be Different
The Bank of Canada figures above are useful benchmarks, but they should not be read as the rate every borrower will receive. A lender’s posted rate is the rate it advertises for a mortgage product, while a discounted rate is lower than that posted rate.
Your actual offer can also depend on your credit history, the interest-rate type, term length and whether you qualify for a discount. Even relatively small differences in the rate matter because mortgage interest is calculated on a large balance.
For that reason, use current closed mortgage rates in Canada to compare equivalent products rather than treating the Bank of Canada posted figures as quotes available to an individual borrower.
Fixed and Variable Closed Mortgages Need Separate Rate Comparisons
A closed mortgage can have either a fixed or variable interest rate. A fixed rate remains unchanged for the term, while a variable rate can change during it.
This means two five-year closed mortgages are not necessarily equivalent. One could be fixed and the other variable, giving them different interest-rate behaviour even though their term lengths and closed classifications match.
The same distinction explains why open and closed variable rate mortgages should be compared separately from fixed-rate products. Open or closed describes the repayment restrictions, while fixed or variable describes what happens to the interest rate during the term.
Compare the Contract Alongside the Rate
The lowest rate can be attractive, but the term attached to it determines how long the agreement remains in effect. A longer closed term can become costly if you later need to renegotiate, repay more than your permitted prepayment amount or pay off the mortgage before maturity because a prepayment penalty may apply.
Before signing, federally regulated lenders must disclose information including the term length, whether the mortgage is open or closed, its annual interest rate and its amortization period. Those mortgage terms must be disclosed before you enter the agreement.
The useful comparison is therefore not simply “Which term has the lowest percentage today?” Compare equivalent fixed or variable products, the length of time you expect to keep the mortgage and the restrictions attached to the closed contract. If repayment flexibility could materially affect that decision, comparing open and closed mortgage rates adds that cost difference to the picture.
Questions About Closed Mortgage Rates by Term
Is a 5-year closed mortgage rate always higher than a 3-year rate?
No. Longer terms typically have higher rates, but that relationship does not always hold. Lenders determine their rates using several factors, so the actual three-year and five-year offers need to be compared when you apply.
Does choosing a 1-year closed mortgage guarantee a lower rate?
No. A shorter term may have a lower rate, but lenders do not guarantee that shorter terms will always be cheaper.
Can you negotiate a closed mortgage rate?
You may be able to obtain a discounted rate below the lender’s posted rate. Asking the lender or mortgage broker whether a lower rate is available can therefore produce a different offer from the advertised posted rate.
