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Mortgages

Three-Year Fixed Mortgages Emerge as Best Option for Borrowers in Fast-Changing Environment

Strategic Insights

— 1 min read

In a rapidly evolving mortgage rate landscape, three-year fixed mortgages are gaining prominence as a viable option for borrowers seeking fixed rates. Daniel Vyner, principal broker of DV Capital Corp., notes that the flexibility in pricing for three-year terms is higher than for five-year terms, potentially indicating lenders' consideration of future rate increases. Currently, the lowest available three-year fixed rate is 3.69%, while the lowest variable rate is 3.7%. This disparity suggests that three-year fixed rate mortgages may be a suitable choice for those unwilling to take on variable rate risks.

Key Takeaways:

  • The lowest available rates on the market are for three-year fixed mortgages, which have hovered between 20 and 25 basis points lower than five-year fixed mortgages in recent weeks.
  • The lowest available three-year fixed rate is currently 3.69%, while the lowest available variable rate is 3.7%.
  • Investors expect either one or two more 25-basis-point interest rate cuts between now and the end of 2026, according to LSEG financial markets data.
  • A three-year fixed rate mortgage could be a good option for borrowers who don't want to take on variable rate risks.
  • Lenders may be considering future rate increases, as suggested by the higher flexibility in pricing for three-year terms.
  • Borrowers are encouraged to ask for a discount or seek a second opinion, given the currently competitive mortgage environment.

Statistics:

  • The lowest available three-year fixed rate is 3.69% (as of market close on Sept. 25).
  • The lowest available variable rate is 3.7% (as of market close on Sept. 25).
  • Investors expect either one or two more 25-basis-point interest rate cuts between now and the end of 2026.
  • The flexibility in pricing for three-year terms is higher than for five-year terms, potentially indicating lenders' consideration of future rate increases.
  • There are 100 basis points in a single percentage point.

Sources:

  • Daniel Vyner, principal broker of DV Capital Corp.
  • Data from
  • LSEG financial markets data
  • .

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