The mortgage refinance rates for Canada will vary based on whether you choose a variable or fixed rate mortgage when refinancing. If you currently have a variable rate mortgage and are looking for regular monthly payments that are consistent, it is best to refinance with a fixed rate mortgage. This will give you a regular recurring payment that does not change, but your interest rate and payment may be higher. If you currently have a fixed rate mortgage and are looking for lower interest rates with the possibility of lower payments, but the payments fluctuate you should refinance with a variable rate mortgage.

When it comes to mortgage refinance rates, variable rates are directly affected by the lender’s prime rate. The prime rate is based on the Bank of Canada rate, which is set and used as a tool to help with goals of stable inflation as well as financial stability for public debt and government funding capabilities. As the central bank, the Bank of Canada sets the prime rate and helps to achieve these above stated goals by controlling the short term rates on mortgages and all lines of credit and all rates that are paid out on deposits or any type of investment certificate.

Fixed term mortgage refinance rates are based mostly on the bonds market. Bonds are a debt belonging to someone that they promise to pay back plus interest at a later date. Bonds are commonly given out by a government to large companies or individual businesses such as the Canada Savings Bonds. The rate of return that is given yearly is called the yield. Bonds yields can be hectic and all over the map, because they are based on the economy, inflation and stock markets as well as global happenings and unemployment. These long term rates for mortgage refinancing are based on these bond yields, and this is why they are used more by lenders. The lenders are able to absorb more of the daily fluctuations in the market, and thereby give a more stable rate for customers. Lower bond yields to a bank lead to lower mortgage refinance rates.

When refinancing a home, it is important to try to use the same lender because the mortgage refinance rates can be manipulated, depending on the lender. Some will allow their loan officers to lower or raise the rates according to a customer’s history, not to become lower than the prime set by the Bank of Canada. If you have a good history with your current lender, it is better to talk to your loan officer and see if there are any options available to you with lower refinance rates. However, if you are unable to get lower mortgage refinance rates, continue to shop around. There are many companies online that post their mortgage interest rates on a closed term loan for at least 10 years. This would give you an idea what the interest rate would be on the day you check the rate, if you were to get your mortgage refinanced on that day.