Variable Rates: What You Need to Know This Fall
The Bank of Canada has made its first rate cut since March 2025, bringing the prime rate down to 4.7% (minus your lender’s discount). If you’re in a variable mortgage or line of credit, this drop will be applied automatically—something many homeowners have been waiting for.
We asked Liane Moskal, Mortgage Agent & Team Lead (KeyRate), to break down what this means for Ottawa buyers, sellers, and current homeowners.
What’s Changed?
New Prime Rate: 4.7% (minus your lender’s discount).
Next Rate Announcement: October 29th.
Stress Test: Variable mortgages now require you to qualify at 6.7% (prime + 2%).
Variable vs. Fixed: Understanding Your Options
Variable mortgages come with flexibility that can be appealing in today’s market. Here’s what to keep in mind:
Lock-In Options: You can switch into a fixed rate at any time without penalty.
Terms Available: Some lenders offer 3-year variable terms, though 5 years remains the most common.
Two Types of Variable Products:
Adjustable Rate Mortgage (ARM): Your payment changes when the rate changes.
Traditional Variable at Big Banks: Your payment stays the same, but the interest vs. principal portion shifts.
Variable rates are also known for their lower penalties if you need to break your mortgage early, making them a strong option for anyone expecting life changes in the near future.
Is Variable Right for You?
Variable isn’t the perfect fit for everyone, but it’s worth exploring—especially if you have a pre-approval in place or are approaching a closing date. It’s not too late to switch to a variable if it makes sense for your situation.
Key Takeaway
This is the first time in months we’ve seen the Bank of Canada shift its stance, and it’s giving buyers and homeowners some breathing room. But the best product for you will always depend on your goals, timeline, and comfort level with risk.
For tailored advice on whether a variable mortgage is the right move, reach out to:
Liane Moskal, Mortgage Agent & Team Lead
📧 liane.moskal@keyrate.com
Liane Moskal
liane.moskal@keyrate.com
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