Effective July 22, 2019, the Bank of Canada 5-year Benchmark Qualifying Rate is 5.19%.
What you need to know
The benchmark rate is a rate that lenders are required to use to qualify mortgage borrowers in Canada.
The benchmark rate made headlines in the early part of 2010 when the Government of Canada announced new rules for lending money and qualifying for mortgage loans. These rules were put in place due to perceived volatility in the market, and the government’s desire to decrease that amount of volatility.
The feds felt this benchmark rate should be based on the consistently higher Bank of Canada conventional five year rate; a rate meant to represent a cross-section of posted bank rates. The conventional five year rate and posted bank rates are much higher than rates that can be available through a mortgage broker in Canada. Typically, the benchmark rate is around 2.50% higher than a mortgage broker’s best rates.