Our 3.99% 6-Mo Fixed is the lowest mortgage rate available in Canada.

2023 Mortgage Rate Recap

Another (mortgage) rollercoaster year in review.

What happened with mortgage rates? Did more clients choose a 5-year fixed rate vs. a variable rate? Here's our 2023 wrap-up.

2023 was 'The Year of Higher Rates'

We spent the year adjusting to the shock of so many outsized rate hikes handed out in 2022 (monsters like 0.50%, 0.75%, and 1.00%) as the Bank of Canada tried to get on top of sky-high inflation and drag the economy down to a normal speed.

Hope was high in 2023

Canadian homeowners were desperate to know that there was a light at the end of the rate-hike tunnel, yet we still saw three more interest rate increases.

Many scrambled and struggled to absorb the higher mortgage costs, especially those with variable-rate mortgages or buying a home among higher market and stress test rates. Our already-lofty home prices didn't help affordability, with the national average price down only about 16% from the peak of March 2021.

"2023 is the year housing affordability became the Number 1 issue in the mind of most Canadians due to rising interest rates and high inflation."

– Dan Eisner, True North Mortgage Founder and CEO

Mortgage payment woes

Renewals ran smack into stress test rates that had some homeowners qualifying at over 8.0%, preventing them from switching lenders to a cheaper rate (though insured borrowers caught a break in the fall).

The government also tried to address mortgage payment woes of almost 50% payment increases in some cases. Directives from the bank regulator and The Canadian Mortgage Charter (Fall 2023) implored banks to help people out with extended amortizations and a sympathetic ear (the latter is not typically part of a Big Bank's skill set).

Variable-rate trouble and shorter fixed terms

If you had a variable rate with fixed payments (called a VRM), you likely found out what your trigger rate and trigger point meant (lurking in your contract). It meant that your amortization was ticking up, often way past the original length, to threaten more mortgage payment shock at renewal.

Those who chose fixed rates this year agonized over the term length — with many more of our clients going with a shorter 3-year term than usual.

A bright (rate) spot?

Despite the higher interest rate environment, mortgage industry competition from companies like True North Mortgage helped to keep rates lower than what they might have been if the Big Banks had their way.

Big Banks saw their slice of the mortgage pie reduced, with over 30% more Canadians choosing better rates and service elsewhere — like at True North.

The end of 2023 finally saw some rate relief. After a bond-yield rollercoaster ride for much of the year (the main setting factor for fixed mortgage rates), a year-end slide due to easing inflation and slowing spending saw lowered fixed rates across the board.

A tightening cycle spill-over into 2023.

With the most rapid policy-rate rise since the 1990s starting from 0.25% in March 2022 (for a total of 16 x 0.25% hikes that year), we saw three more hikes from the Bank of Canada (BoC) in 2023 to rest at 5.0% and bring bank prime rates to 7.20%

January's 0.25% hike was the tail end of the 2022 'major tightening cycle,' and June and July's hikes of 0.25% were in response to economic resiliency (too-warm spending and jobs market) and the central bank's concern that inflation's decline would snag on its way to its 2.0% target.

Mortgage holders the country-over were relieved to see the BoC continue a rate hold to end out 2023.

Inflation's deflation from 6.3% to 3.1%.

Inflation started out the year at a lofty 6.3% (from a high of 8.1% in June of 2022) and was reduced by almost half to 3.1% by year's end. However, the cooling of price increases hit a couple of snags, with CPI (Consumer Price Index) readings going up in May and again in August.

The May snag brought out two more policy rate hikes from the Bank of Canada (June and July), but the August snag didn't provoke another hike, with concern about pushing Canadian budgets over the edge. Inflation continued to cool for the rest of the year as the rapid rate-hike cycle worked its way through the economy.

Word of the Year: Innovation

We’re industry disruptors. We didn’t disappoint.
Our lower rates and low-rate products led the way.

Innovative rate products that saved clients more.

True to our (mortgage) nature, we helped many home buyers and owners find better affordability and lower payments, leading the way with innovative mortgage products in 2023.

  • Our Rate Relief™ short-term products offered the lowest 6-month and 1-year fixed rates in Canada
  • Our No Commitment Mortgage™ offered the lowest open variable rate in Canada

These products gave homeowners a chance to get a budget break during 'The Year of Higher Rates,' with a strong possibility of renewing into lower market rates later to save more.

True North Mortgage was also able to gift clients the best nationally available 5-year insured fixed rate of 4.87% in time for the holiday stretch. Insured fixed rates saw 5's and 6's for a good chunk of 2023.

Top Mortgages Products

True North Mortgage (all lenders, including in-house, CMHC-approved THINK Financial) saw these three mortgages chosen most often.

The 5-year fixed rate ranked the highest, though less so than usual (typically chosen around 60% of the time) in favour of more 3-year fixed rate choices.

The 5-year variable rate still held sway, likely due to the high probability that the rate hikes were almost done.

1. 5-Yr Fixed-Rate (43%)

2. 3-Yr Fixed Rate (22%)

3. 5-Yr Variable-Rate (18%)

Top Mortgage Transactions

True North Mortgage helped many clients buy a home with discounted mortgage rates or switch lenders for a better deal and extra budget room.

Others sought a refinance, with many choosing to extend their amortization for lower payments or tap home equity to consolidate higher-rate debt with a lower rate.

1. Purchases (55%)

2. Switches (29%)

3. Refinances (16%)

2023: Fixed vs. Variable Rate

Variable rates weren't very popular at the beginning of 2023, with rate hikes still on the Bank of Canada's agenda.

After the final two 0.25% hikes in June and July (which directly affect variable-rate mortgages), 5-year variable-rate mortgages gained in popularity by year's end, surpassing the 5-year fixed rate (usually chosen 60% of the time vs. 30% for variables) — as some clients strategized that rates may have peaked and looked to benefit on a climb down.

2023: Term Length Choices

In 2023, the 3-year fixed rate saw substantial interest, far surpassing its typical allure.

With interest rates at a 22-year high, home buyers and owners wanted the security of a fixed mortgage rate and unchanging payments, but not the longer 5-year lock-in — with rates potentially on the way down in the coming months and years.

Over $3B in Funded Deals

2023 was a slower year for the mortgage industry. Yet, we helped so many Canadians, coast to coast, get a better rate and mortgage through a simpler process.

True North Mortgage first came onto the mortgage scene in 2006, and we've been providing home buyers and owners with a better choice than going directly to a Big Bank ever since.

Reviews cup

Over 1,900 more 5-star reviews

We continued to provide excellent service — simplifying the mortgage process for our clients while finding their lowest rate and the right mortgage fit.

They let us know how much they appreciated the unbiased advice and streamlined experience by giving us another whopping 1,900 5-star reviews this year!

Mortgage challenge — accepted. We're here to help, all year round.

With higher rates, getting great mortgage advice that puts you first can make a huge difference.

Your mortgage is likely one of the biggest financial commitments you'll take on, and even a few cents off your rate — or a mortgage that doesn't come with costly restrictions — can save you thousands over the term and life of your mortgage.

Talk to us today to see what we can do for you. We're here online, over the phone, through email, or drop by a store location.