- Bank of Canada policy rate: 2.50% from 2026-10-29 (raised 0.25 points; announced October 28, 2026).
- Prime: 4.70% since the October 29, 2026 policy increase (the big banks’ own primes are 4.70%; TD’s separate mortgage prime is 4.85%). The Bank of Canada’s weekly series shows it from 2026-11-11.
- Some banks adjust your payment when prime moves; others keep the payment fixed and change how much goes to principal.
- Closed variable mortgages at the big banks are usually broken for 3 months’ interest.
How is a variable mortgage rate set?
Your rate = bank prime ± your spread. The spread is fixed for the term; prime is not. Many lenders compound variable rates monthly (check your contract), so try the “monthly” compounding setting in the payment calculator.
The Bank of Canada announced on October 28, 2026 that it was raising its policy rate by a quarter point to 2.50%; the next scheduled announcement is December 9, 2026. Banks set their own prime; confirm each bank’s current prime on its site.
5-year postedPrimePolicy rate
What is the difference between adjustable and fixed-payment variable mortgages?
With an adjustable-rate mortgage, your payment changes when prime changes. With a fixed-payment variable, the payment stays the same and the split between interest and principal changes; if rates rise far enough you can reach a trigger point where payments no longer cover interest. Each bank’s products and wording are on its profile.
What does it cost to break a variable mortgage?
Penalties on closed variable mortgages are usually 3 months’ interest. What each big bank says:
| Bank | Penalty method, in the bank’s words |
|---|---|
| RBC Royal Bank | Greater of 3 months’ interest or IRD vs RBC’s posted rate for a similar term, less your rate reduction. Variable: 3 months’ interest. |
| TD Canada Trust | Higher of 3 months’ interest or IRD using TD’s posted rate for a similar mortgage minus your discount. Variable: 3 months’ interest. |
| Scotiabank | Greater of 3 months’ interest or IRD vs Scotiabank’s posted rate for the closest term, less your discount. Variable: 3 months’ interest. |
| BMO Bank of Montreal | Higher of 3 months’ interest or IRD vs BMO’s posted rate for the closest term, taking your discount into account. Variable: 3 months’ interest. |
| CIBC | Greater of 3 months’ interest (at your rate + discount) or IRD vs CIBC’s current posted rate. Variable: 3 months’ interest at CIBC Prime. |
| National Bank | Higher of 3 months’ interest or 1 month’s interest (max $500) plus the interest differential. Variable: 3 months’ interest. |
What are the big banks’ variable rates right now?
Each bank sets its own prime and its own spread, so compare the rate itself. TD prices its variable mortgages off a separate TD Mortgage Prime Rate. Scotiabank publishes no fixed special and we don’t list its variable offers, so its row has no special (its posted variable: Flex Value 5.15%).
| Bank | Prime used | 5-yr variable special | Spread | Monthly payment |
|---|---|---|---|---|
| RBC | RBC Prime: 4.70% | 4.40% | prime − 0.30% | $2,750.86 |
| TD | TD Mortgage Prime: 4.85% | 4.54% | prime − 0.31% | $2,790.53 |
| Scotiabank | Scotiabank Prime: 4.70% | — | — | — |
| BMO | BMO Prime: 4.70% | 4.35% | prime − 0.35% | $2,736.76 |
| CIBC | CIBC Prime: 4.70% | 4.30% | prime − 0.40% | $2,722.71 |
| National Bank | National Bank prime: 4.70% | 4.35% | prime − 0.35% | $2,736.76 |
How much does your payment change when prime moves?
With an adjustable payment, every prime move changes what you pay. Starting from RBC’s 4.40% 5-year variable special on $500,000 over 25 years, the payment moves as below. With a fixed-payment variable (TD’s design), the payment stays at $2,750.86 and the share going to interest changes instead; the last column shows the interest share of the first payment.
If the rate reached about 6.60% (2.20 points above today’s), a fixed $2,750.86 payment would only cover the interest. TD says that if its payment no longer covers interest you must adjust payments, prepay or pay off the balance.
| Prime change (pts) | Your rate | Adjustable payment | Change | Interest share, fixed payment |
|---|---|---|---|---|
| −0.50 | 3.90% | $2,611.65 | −$139.20 | 59% |
| −0.25 | 4.15% | $2,680.77 | −$70.09 | 63% |
| No change | 4.40% | $2,750.86 | — | 67% |
| +0.25 | 4.65% | $2,821.90 | +$71.05 | 70% |
| +0.50 | 4.90% | $2,893.89 | +$143.03 | 74% |
| +1.00 | 5.40% | $3,040.65 | +$289.79 | 82% |
Fixed or variable: what should you weigh?
- The gap today. RBC’s 5-year fixed special was 5.14% and its variable special 4.40% on November 2, 2026. On $500,000, the variable would charge about $3,419 less interest in year one if prime didn’t move. Prime can move either way.
- Your room in the budget if the payment (or the interest share) rises.
- The cost of leaving early. Closed variable mortgages are usually broken for 3 months’ interest; a big-bank fixed term can cost an IRD. See IRD vs 3 months’ interest.
- Conversion options. Scotiabank says a Flex Value variable can be converted to a fixed term longer than the time remaining with no prepayment charge. Ask your bank what its variable allows.
- Which prime you are on. A bank’s spread is only comparable against the same prime.
What should you ask before you choose a variable mortgage?
- Which prime does it follow, what is that prime today, and what is my spread?
- Does my payment change when prime moves, or stay the same while the principal share changes?
- If it stays the same, what happens when the payment no longer covers the interest?
- Can I convert to a fixed term during the term, at what rate, and is there a charge?
- How is the 3 months’ interest calculated if I break it? CIBC uses CIBC Prime; Scotiabank uses your variable rate at the time of prepayment.
- How is the rate compounded? Many lenders compound variable rates monthly; your contract says which.
Worked example: same $500,000, two primes
TD’s 5-year variable special (TD Mortgage Prime − 0.31% = 4.54%) costs $2,790.53 a month over 25 years; BMO’s (4.35%) costs $2,736.76. If prime rose 0.25 points, a payment that adjusts would rise to about $2,807.62; TD says its variable payment stays the same and the principal share changes instead. Ask BMO which applies to its product.
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
- Compare variable offers on the rate itself, not the spread: primes differ.
- Know whether your payment adjusts or stays fixed when prime moves.
- See RateChange.ca for trigger-rate and renewal-shock calculations.
Rules change. Every figure on this page links to the official source and shows when we checked it. If something looks out of date, tell us and we will re-check.
Frequently asked questions
Can I lock a variable into a fixed rate?
Often. Scotiabank, for example, says a Flex Value variable can be converted to a fixed term longer than the time remaining with no prepayment charge. Ask your bank for its conversion rules.
What is a trigger rate?
With a fixed-payment variable mortgage, it is the rate at which your regular payment only covers the interest. TD says that if its variable payment no longer covers the interest, you must adjust payments, prepay or pay off the balance.
Why does TD’s variable rate look high for its spread?
TD prices its variable mortgages off the TD Mortgage Prime Rate (4.85% when we checked on November 2, 2026), not the 4.70% prime the other big banks showed. Compare the variable rate itself, not the spread.
Sources
- Valet API: posted conventional mortgage rates (V80691333–35), prime (V80691311), policy rate (V39079) — Bank of Canada, checked Oct 31, 2026
- Policy interest rate — Bank of Canada, checked Oct 31, 2026
- Reduce or avoid prepayment penalties — FCAC, checked Oct 31, 2026
- Mortgage rates — RBC Royal Bank, checked Nov 2, 2026
- Mortgage rates — TD Canada Trust, checked Nov 2, 2026
- Mortgage rates — Scotiabank, checked Nov 2, 2026
- Today’s mortgage rates — BMO, checked Nov 2, 2026
- Mortgage rates across Canada — CIBC, checked Nov 2, 2026
- Mortgage rates — National Bank, checked Nov 2, 2026
- TD mortgages and rates (products) — TD Canada Trust, checked Oct 31, 2026
- Scotia Flex Value Mortgage, closed term — Scotiabank, checked Oct 31, 2026
Educational information only, not financial, legal or tax advice. BankMortgages.ca is independent and is not affiliated with, endorsed by or paid by any bank named on this site. Bank terms change: confirm every rate and term with the lender and the official sources linked on each page before you act. Read the full disclaimer.
