🏡 Should You Lock In a 5-Year Fixed Rate Before Fall 2025?

Introduction

With mortgage rates hovering near multi-year highs and hints of potential rate cuts later in 2025, many Canadians are asking: Is now the time to lock in a 5-year fixed mortgage?
The decision between locking in today’s rate or waiting for potential declines depends on your financial stability, market outlook, and risk tolerance.

1. Where Mortgage Rates Stand in August–September 2025

As of late summer 2025, 5-year fixed mortgage rates in Canada range from 4.89% to 5.39%, depending on the lender and borrower profile. The Bank of Canada has held its overnight rate steady since early 2025, and inflation continues to ease slowly.
However, bond yields — which drive fixed mortgage rates — remain volatile due to global economic uncertainty.

Key takeaway: Rates have plateaued, but the fall season could bring change.

2. Why Locking in a 5-Year Fixed Rate Can Make Sense

A 5-year fixed mortgage offers peace of mind and predictable payments, making it ideal for stability-focused homeowners.
Benefits include:

• Protection from future volatility: Even if rates rise again before year-end, your payments stay the same.

• Simplified budgeting: Perfect for families or investors planning long-term financial stability.

• Potential to refinance later: If rates fall significantly, you can refinance — though penalties may apply.

For those expecting to stay in their home for several years, locking in now could prevent overpaying if markets shift unexpectedly.

3. Why Some Borrowers Are Waiting

On the other hand, economists and market analysts expect the first Bank of Canada rate cut by late 2025 or early 2026. This could push fixed mortgage rates lower in the coming months.
Borrowers with flexible finances or short-term plans may prefer a variable rate or shorter fixed term (e.g., 2 or 3 years) to capture potential savings later.

4. RateShop’s Strategic Advice

At RateShop, we recommend evaluating:

• Your financial horizon: If you’ll own your home for 3–5 years, a fixed term adds stability.

• Your budget flexibility: If you can handle possible short-term payment fluctuations, a variable or shorter fixed term may save more long-term.

• Your renewal timing: If your mortgage renews soon, securing a rate hold for 120 days lets you wait and see without pressure.

Conclusion

Locking in a 5-year fixed mortgage before Fall 2025 is a strategic move for those seeking certainty in an uncertain economy. But if you’re comfortable with some risk and expect rates to fall, a shorter term might offer better value.
Either way, comparing lenders and products through RateShop.ca ensures you get the best deal — fixed or variable.