Where our rates come from
Any tool that tells you what you could save is only as good as the rate it assumes. So here is ours, with the working shown.
Two different things
Variable rates really do follow the Bank of Canada. Prime sits a fixed step above the overnight policy rate — 2.20 percentage points, unchanged for years — and a variable mortgage is prime less whatever discount a lender will give you.
Fixed rates do not work that way, and this is where a lot of commentary goes wrong. They are priced off Government of Canada bond yields at a matching term, because that is what lenders fund with. The five-year yield reflects where markets think rates are going, which is why fixed rates sometimes move before the Bank does, and occasionally in the opposite direction.
So we use two formulas, not one:
fixed (term) = Government of Canada bond yield at that term + lender spread variable = prime rate - lender discount
Today’s numbers
Last updated
Bond yields and prime: published by the Bank of Canada on October 30, 2026. We read them directly from its public Valet service.
Lender spreads: from a broker quote on October 28, 2026.
What moved over the last month, in plain language: Mortgage rates in October 2026: furnace on, numbers out.
Policy rate
2.5%
Target for the overnight rate
Prime rate
4.45%
1.95 points above the policy rate
| Term | Bond yield | Lender spread | Our estimate | Source |
|---|---|---|---|---|
| 1 year | 3.28% | + 1.53 | 4.81% | broker quote |
| 2 year | 3.28% | + 1.33 | 4.61% | broker quote |
| 3 year | 3.38% | + 1.34 | 4.72% | broker quote |
| 4 year | 3.44% | + 1.33 | 4.78% | broker quote |
| 5 year | 3.51% | + 1.32 | 4.83% | broker quote |
| Variable | prime 4.45% | − 0.60 | 3.85% | broker quote |
The honest part: the spread is a judgment
The bond yields above are facts, published daily, and we do not touch them. The lender spread is a judgment, and it moves. Spreads widened sharply in 2008, 2020 and 2022, when fixed rates came adrift from bonds for months at a time.
Each month the Bank of Canada publishes the average rates Canada’s chartered banks charged on new mortgages, by term. We take the rates on new uninsured mortgages, subtract the average bond yield over the same month, and use what’s left as the spread. Those figures arrive two or three months after the month they describe, so they show what banks were charging rather than what you’d be quoted today. When a partner mortgage broker has given us their own rates within the last 45 days, their figures are used instead.
So the spread carries an age. If it hasn’t been refreshed from either source in 45 days, we stop sending rate alerts entirely, even though the bond yields underneath are perfectly current. A stale spread is the more dangerous of the two, because the rate it produces still looks fresh.
What this is not
These are not offers, and they are not quotes. We are not a lender or a brokerage, and we cannot hold a rate for you. What you are actually offered depends on your circumstances, your property, your credit, whether the mortgage is insured, and which lender you approach.
The calculator does not use these numbers unless you let it — you type your own rate, and yours should win. These are what we fall back on when re-checking a saved scenario for a rate alert, and every alert says so.