Posted rates vs special rates: what the big banks’ numbers mean

Where do posted mortgage rates come from?

Each bank sets and publishes its posted rates. The Bank of Canada publishes a weekly “conventional mortgage” series that reflects the chartered banks’ typical posted rates. On 2026-11-11 it showed 5.49% for 1-year, 6.05% for 3-year and 6.19% for 5-year terms.

Posted rates move slowly. The prime rate, which drives variable mortgages, is 4.70% since the Bank of Canada raised its policy rate to 2.50% effective 2026-10-29. TD prices its variable mortgages off its own, higher mortgage prime.

Why do so few borrowers pay the posted rate?

Banks compete through advertised specials, rate holds, cash-back offers and discretionary discounts. A broker quote or a competing bank’s offer is often enough to get a discount. Insured mortgages (less than 20% down) often price lower than uninsured ones because the default risk sits with the insurer.

To judge any quote, compare it with current data on IsThisAGoodRate.ca, which scores a rate against dated Bank of Canada benchmarks.

Why does the posted rate still matter for your penalty?

If you break a closed fixed mortgage, RBC, TD, Scotiabank, BMO and CIBC all describe an interest rate differential (IRD) that compares your rate with a posted rate for a term close to the time remaining, adjusted for the discount you received. A big discount on day one can therefore mean a big penalty later. FCAC’s own example uses a posted rate for the remaining term.

Worked example at TD: you signed at 5.29% when the posted 5-year was 6.89% (a 1.60% discount). With 30 months left, TD’s posted rate for the closest term is 6.15% (November 2, 2026). The comparison rate is 6.15% − 1.60% = 4.55%, so the IRD on $480,000 is $480,000 × 0.74% × 30/12 = $8,880, compared with 3 months’ interest of $6,348. Try it in the penalty analyzer.

How big is each bank’s discount off posted at each term?

Discounts aren’t the same across terms or banks. On November 2, 2026 the widest gap between a bank’s posted rate and its own special was 1.25 points (RBC, 7-year), while National Bank’s 1-year special was no lower than its posted rate. BMO’s 5-year special is its Smart Fixed, which has its own posted rate (5.99%, against 6.09% for its regular 5-year), so the gap shown is against that.

Does a bigger discount mean a bigger penalty?

Not between two borrowers at the same big bank. In the formulas the banks publish, your discount comes off the comparison rate, so it cancels out: before any present-value adjustment, the IRD works out to your balance × (the posted rate when you signed − today’s posted rate for the comparison term) × months left / 12. What makes it large is posted rates falling after you sign. Your discount still lowers the interest you pay every month, and at RBC, TD, Scotiabank and BMO the 3 months’ interest too (CIBC and National Bank calculate that at a higher rate).

Two RBC borrowers, each owing $450,000 with 36 months left after posted rates have fallen 1 point, signed when the 5-year posted was 6.19%. One took the 5.14% special, the other negotiated 0.25 point more off. Their IRDs match; the second saves about $5,408 of interest over a full five-year term. The discount matters when you compare methods: when posted rates sit well above offered rates, a lender that compares with its current rate can produce a smaller IRD, as the IRD guide explains.

What should you check before you accept a special rate?

• The conditions attached. Scotiabank’s special offers require the mortgage to be advanced within 120 days of application; TD’s high-ratio special is for less than 20% down on a property under $1,500,000.
• The amortization it assumes. RBC and BMO show different specials for amortizations of 25 years or less and over 25 years.
• What you give up. BMO’s Smart Fixed carries 10% / 10% prepayment privileges instead of the 20% / 20% on its other closed mortgages.
• How long the rate is held. RBC holds a new-mortgage rate for up to 120 days (30 days at renewal); National Bank’s pre-approval protects the rate for 120 days; BMO gives Homeowner ReadiLine mortgage portions a 130-day guarantee.
• The posted rate behind your special, in writing. It is the number your future penalty is measured from.

Worked example: each bank’s 5-year discount, broken two years in

A new $450,000 5-year fixed at each bank’s own special, broken after 24 months. With posted rates unchanged most land on 3 months’ interest; if posted rates fall 1 point, the discount you got on day one widens the IRD.

Computed by this site’s engine from each bank’s published rates (November 2, 2026) and the rules cited below. An example, not a quote.

What this means for you

• Ask for your mortgage’s posted rate at signing; it’s in your documents and sets your future penalty.
• A bigger discount today is worth it if you keep the term; less so if you’re likely to break.
• Score any quote against market data on IsThisAGoodRate.ca.

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