Deciding when to lock in your mortgage rate is one of the biggest financial choices you’ll make as a Canadian homeowner or first-time buyer. It’s a bit like walking a financial tightrope, on one side, fixed mortgage rates offer steady, predictable payments that protect you from future interest rate hikes.
On the other hand, variable mortgage rates often start lower and could save you thousands if interest rates drop. But in today’s market, nothing is guaranteed. With inflation still lingering, economic uncertainty in the air, and the Bank of Canada closely monitoring bond yields, the question of whether to lock in your mortgage has never been more urgent.
What Do Canadian Mortgage Experts Say About Locking Rates in 2025?
Let’s explore expert opinions, current market trends, and practical advice to help you make the right move, whether you’re locking in or waiting it out.
Understand What It Means to Lock In Your Mortgage Rate
To lock in a mortgage rate means you’re securing the interest rate offered by a lender for a specific period, typically 30 to 120 days. This protects you from rate increases while your mortgage application is processed. If rates go up during that time, your agreed-upon rate stays the same.
But here’s the key: locking your rate doesn’t always mean you’re getting the lowest rate available. It’s about locking in predictability and avoiding sudden payment increases.
Compare Fixed vs Variable Mortgage Rates in 2025:
In Canada, the choice between a fixed mortgage and a variable mortgage is one of the biggest decisions you’ll make. Let’s break it down:
- Fixed-rate mortgages give you steady monthly payments. Once locked, your interest rate won’t change for the full term (usually 3 to 5 years). Great for budgeting and peace of mind.
- Variable-rate mortgages follow the Bank of Canada’s< prime rate. Your payments may change during your term, meaning potential savings or higher costs depending on rate trends.
2025 trend: Fixed rates are hovering around 4.4–4.6%, while variable rates are close behind at 4.5–4.7%. That’s a small difference, but in the long term, it can impact your total cost significantly.
What Canadian Experts Recommend Right Now?
Let’s look at what some trusted names in the mortgage world are saying in 2025:
- True North Mortgage says: Lock in your rate if you’re risk-averse. Fixed is safer now, but variable gives flexibility to switch later without big penalties.
- NerdWallet Canada advises: If you find a sub-4% fixed rate, grab it. Fixed mortgage rates are slowly climbing, and we may not see them drop significantly this year.
- Mortgage Sandbox / Altrua points out: If you’re planning to move, refinance, or break your mortgage in the next 1–3 years, go with variable, since penalties are typically much lower than fixed.
Overall takeaway: Experts are leaning slightly toward fixed rates for those who want long-term security, but variable rates still make sense if you’re looking for flexibility or short-term savings.
Is This the Right Time to Lock In?
Timing is everything. Rates are still high compared to pre-2022 levels, but they’ve settled in 2025 and are slowly climbing again. If you see a competitive fixed rate below 4.5%, locking it in could save you stress, especially with bond yields inching up and no major Bank of Canada rate cuts expected soon.
But if you’re comfortable watching the market and adjusting your mortgage later, sticking with a variable rate might give you more options and possibly better savings. Moreover, explore smart renewal strategies with Mortgage Squad and secure the best rates and terms for your next term. Discover how to renew your mortgage the smart way.
Who Should Choose Fixed vs Variable in 2025?
Choosing between a fixed or variable mortgage rate depends on your personal goals, risk comfort, and future plans. Here’s a quick breakdown to help guide your decision:
Go for a Fixed Rate if:
- You’re a first-time homebuyer who values predictable payments.
- You plan to stay in the same home for the next 4–5 years.
- You’re concerned about rising interest rates and want long-term payment stability.
- You’ve found a competitive fixed rate (ideally below 4.5%) and want to lock it in before rates increase further.
Choose a Variable Rate if:
- You’re comfortable with some rate fluctuation and want to save more upfront.
- You think the Bank of Canada might lower rates in the near future.
- You plan to sell your home, upgrade, or refinance within 2–3 years.
- You want lower mortgage penalties in case you break your term early.
Quick Tip: Many variable mortgages allow you to switch to a fixed rate mid-term without paying a penalty, giving you flexibility to adapt. Talk to Mortgage Squad today for expert guidance and Learn more about how interest rate changes impact private mortgage payments.
Tips to Make the Most of a Rate Lock:
Locking in your mortgage rate is smart, but only if you do it the right way. Here are some pro tips:
- Start early. As soon as you apply for pre-approval, ask your lender about a rate hold. Some offer up to 120 days of protection.
- Ask about “float-down” clauses. This lets you take a lower rate if the market drops before closing, without breaking your lock.
- Watch the bond market. If bond yields rise, fixed rates usually follow. Lock in before that happens.
- Stay flexible. Even if you lock in, you can ask your lender to revise the rate if something better becomes available before closing day.
Let Mortgage Squad help you balance your budget and save time. See how rising rates are affecting Canadians’ love lives
Your Next Step – Let Mortgage Squad Guide You:
Whether you’re buying your first home, renewing your mortgage, or refinancing, our team is ready to compare Canada’s best fixed and variable rates, explain the real costs, and help you lock in with confidence. Let’s build your mortgage strategy today, because the right rate is just the beginning.