Borrowers Outmaneuver Banks to Snag Historic Low Refi Rates

On Sept. 18, 2025, mortgage refinancing rates in the Canadian market continue to reflect competitive offers from a range of lenders, particularly for fixed and variable rate products. A detailed analysis of current offers reveals a spectrum of options, with brokers often playing a pivotal role in securing the most favorable terms. In recent discussions from online forums such as RedFlagDeals.com, borrowers have reported securing fixed rates as low as 4.94% for 5-year terms, which is notably below the broader market average. These rates are typically available for owner-occupied properties with good credit profiles and higher down payments or equity positions.

In the variable rate segment, lenders are offering competitive options with discounts off the prime rate, including 5-year closed variable rates as low as Prime minus 1%. These types of variable rates are popular among borrowers who seek flexibility but are mindful of potential penalties for early refinancing or switching. Some institutions, like Scotia Bank and Industrial Alliance Pacific, are noted for offering closed variable rates with Prime minus 0.85 to 1.00, depending on the lender and the borrower's financial profile. Open variable options are also available, with some lenders offering as much as Prime minus 0.95 without significant prepayment penalties, making them appealing to those anticipating a move or refinance within a shorter time frame.

For borrowers who are considering a refinance or a mortgage transfer, the timing and preparation are critical. Brokers in the community often suggest that applicants contact their brokers between 90 to 120 days before the expected closing or renewal date to secure the best rates and avoid penalties. Refinancing typically requires a strong credit history and sufficient income to support the new mortgage payments. Additionally, competitive rates that include the coverage of appraisal and legal fees are more commonly available for transfers, although break fees from previous mortgages are generally not covered.

In the current market, fixed-rate mortgages are particularly attractive for those who wish to lock in long-term predictable payments, especially given the potential for interest rates to rise in the future. On the other hand, variable-rate mortgages offer the advantage of potential savings if the prime rate remains stable or decreases. Borrowers must weigh these factors carefully, considering their financial goals and risk tolerance. As of this report, 5-year fixed rates are available as low as 4.94%, while variable rates offer rates below 5.25% for both open and closed products. These rates are subject to change and depend on individual borrower qualifications, including credit score, property value, and loan-to-value ratio.