Posted vs discounted mortgage rates in Canada

What a posted mortgage rate is

Every lender publishes posted rates for its terms. The Bank of Canada collects the chartered banks' posted rate for a five-year conventional mortgage (one without default insurance) as series V80691335, updated weekly. The Bank of Canada series is a long public record of what the chartered banks advertise. The posted rate is a reference point, not what most people pay.

Posted rates published by the Bank of Canada, not a quote: series V80691335 was 6.19% in the week of October 21, 2026 (source: Bank of Canada Valet, fetched October 2026). The chart shows the series since 2000 beside the prime rate.

Most borrowers are offered less than the posted rate

The rate in most mortgage contracts is lower than the posted rate for the same term. The size of a discount generally depends on the lender, the term, whether the mortgage is insured, your application and the date. There is no single "right" discount.

Because discounts vary, you can only judge an offer against what other lenders would offer you for the same term on the same day.

At renewal, the Financial Consumer Agency of Canada notes that if you negotiate with your current lender, you may qualify for a discounted rate lower than the one quoted in your renewal letter (checked October 2026).

Why the discount matters for your penalty

On a fixed mortgage, the penalty for breaking the term is usually the higher of three months' interest or the IRD. The IRD compares your rate with the lender's current rate for the time left in your term. Lenders may use posted rates to work out the IRD, and your contract governs (source: Financial Consumer Agency of Canada, checked October 2026).

Many lenders that use posted rates take today's posted rate for a term close to what you have left and subtract the discount you received when you signed. Today's posted rate minus your original discount is the comparison rate those lenders use.

Because the discount comes off a posted rate, the comparison rate can land well below anything you would be offered. The wider the gap between the comparison rate and your rate, the larger the IRD.

A worked example of the same IRD under two methods

Illustrative, not a quote, and simplified; your lender's method may differ. You owe $400,000 on a fixed mortgage with three years left, and you signed at a discount of 1.5 percentage points below the posted rate.

1. Comparing with a rate the lender offers today: if that rate is 0.5 percentage points below yours, the IRD is about $400,000 × 0.5 ÷ 100 × 3 years = $6,000.
2. Comparing with today's posted rate minus your 1.5-point discount: if that comes out 1.0 percentage point below yours, the IRD is about $400,000 × 1.0 ÷ 100 × 3 years = $12,000.

With the same mortgage on the same day, the posted-rate method alone doubles the IRD in this example. The lender charges whichever is higher, the IRD or three months' interest.

What a federally regulated lender has to tell you about the penalty

Under the federal Code of Conduct on mortgage prepayment information, federally regulated lenders give you yearly information on how the prepayment charge is calculated. For an IRD, the yearly information includes how the comparison rate is set. On request, federally regulated lenders give you a written statement of the prepayment charge and how it was worked out (source: Financial Consumer Agency of Canada, checked October 2026). Ask for the written statement before you sell, refinance or switch mid-term.

Our monthly note on discounts from posted rates

We plan a short monthly note on how far below the posted rate the offers we review sit. The first note publishes after launch; there is no figure yet.

The monthly note follows this method, fixed in advance:

• What the note measures: each month, for each term, the median gap between the rate on the offers we reviewed and the Bank of Canada posted rate for the same term in the month of each offer.
• Which posted rate the note uses: series V80691333 (1-year), V80691334 (3-year) or V80691335 (5-year). The note compares other terms with the 5-year series and labels them as such.
• Which offers count: only offers a bank, credit union or lender made directly to the borrower; offers that came through another mortgage broker are not counted.
• What the note shows: aggregates only. The note never shows an individual offer, borrower, lender or property.
• What every note states: the number of offers behind each figure and the month it covers.
• When the note publishes a term: only when we reviewed at least 10 offers for the term that month; below 10, the note shows "not enough offers this month" for that term.

Sources

• Bank of Canada — Valet API, series V80691335 (Conventional mortgage, 5-year), fetched 2026-10-24.
• Financial Consumer Agency of Canada — Reduce prepayment penalties, checked 2026-10-26.
• Financial Consumer Agency of Canada — Code of Conduct for Federally Regulated Financial Institutions, Mortgage Prepayment Information, page dated 2025-09-24, checked 2026-10-26.
• Financial Consumer Agency of Canada — Renewing your mortgage, page dated 2025-10-15, checked 2026-10-26.

What to do next

To see where your own offer sits, enter your offer in the offer check. Then send us the numbers: a licensed broker compares your offer with what the lenders we work with are offering this week and replies within one business day. To estimate a penalty, try the penalty estimator.