Canada's Variable Mortgage Rates Hold Steady Amid Economic Uncertainty

The current variable mortgage rates in Canada are hovering at their current levels due to the Bank of Canada's decision not to announce its next rate decision until September 2, 2026. According to NerdWallet, as of August 5, 2026, some of the best variable mortgage rates offered by top lenders include a 3.59% 5-year variable rate from Meridian, and 3.60% 5-year variable rates from Marathon Mortgage, Pine Financial, and Radius Financial.

Variable mortgage rates are often considered attractive due to their lower pre-payment penalties compared to fixed-rate mortgages. However, if the Bank of Canada raises its overnight rate in response to high inflation caused by the war in Iran, variable mortgage rates may increase. Analysts expect the Bank to hold the overnight rate for most of 2026, but the current economic situation has changed the outlook.

Mortgage experts recommend considering factors such as prime rate, inflation, and financial situation when choosing a variable mortgage rate. It's also essential to understand the pros and cons of variable mortgage rates, including the potential risks of increasing interest rates and pre-payment penalties.