Dibz4-year fixed mortgage rates in Canada (2026): the overlooked term
4-year fixed mortgage rates in Canada: how the term prices next to 3- and 5-year rates, insured vs uninsured averages, penalties and a payment example.
A 4-year fixed mortgage keeps your rate and payment the same for four years. It is less common than the 5-year, and Canada has no official 4-year rate series. The Bank of Canada places 4-year loans in its "3 to less than 5 years" bucket, which averaged 3.99% for new insured mortgages and 4.08% for uninsured ones in July 2026.
That bucket has been one of the cheaper places on the rate curve lately. Here is how a 4-year term is priced, when it can be useful and what the payment looks like.
What a 4-year fixed mortgage is
The term is the four-year contract; the amortization (usually 25 years, or up to 30 for some borrowers) is the full payoff schedule. After four years you renew the remaining balance at whatever rates exist then. The 4-year gives almost as much certainty as a 5-year while moving your renewal a year earlier, which some borrowers use to line the renewal up with another life event.
Why choose four years instead of five?
A few reasons come up again and again:
- Timing a renewal. If you expect to sell, retire or refinance in about four years, a matching term avoids breaking a 5-year term with a year left.
- Spreading renewal risk. Households with a rental property or a second mortgage sometimes stagger terms so everything doesn't renew in the same year.
- Price. An individual lender's 4-year rate can land below its 5-year rate, or above it. Comparing quotes for both terms shows which way it falls.
And reasons it might not fit:
- If you want the longest practical certainty, the 5-year gives one extra year at a similar price range.
- Fewer lenders promote a 4-year term, so it may take more asking around to compare offers.
How 4-year rates usually compare
Since we don't hold a 4-year series, here's what we can say from the data we have:
- Posted rates on September 30, 2026 were 6.05% for 3 years and 6.09% for 5 years. A bank's posted 4-year rate commonly sits close to those, though each bank sets its own.
- Actual new-loan rates in the 3-to-5-year bucket (which includes 3- and 4-year terms) were 3.99% insured and 4.08% uninsured in July 2026.
- For comparison, 5-year-and-over loans averaged 4.05% insured and 4.49% uninsured, and 1-to-3-year loans 4.88% and 5.31%.
- Fixed, 1 to <3 yrs
- Fixed, 5+ yrs
- Fixed, 3 to <5 yrs
New-loan averages are the Bank of Canada's monthly average rates on residential mortgages advanced (series V122667776–V122667786), published about two months behind. A 4-year fixed falls in the "3 to <5 years" bucket, which averaged 3.99% insured and 4.08% uninsured in July 2026.
Source: Bank of Canada (free at bankofcanada.ca)
Show the numbers
| Fixed, 1 to <3 yrs | Fixed, 5+ yrs | Fixed, 3 to <5 yrs | |
|---|---|---|---|
| Sep 2024 | 5.9% | 4.5% | 4.6% |
| Oct 2024 | 5.7% | 4.4% | 4.4% |
| Nov 2024 | 5.6% | 4.3% | 4.3% |
| Dec 2024 | 6% | 4.2% | 4.3% |
| Jan 2025 | 5.9% | 4.3% | 4.3% |
| Feb 2025 | 5.8% | 4.3% | 4.3% |
| Mar 2025 | 5.7% | 4.1% | 4.2% |
| Apr 2025 | 5.7% | 4% | 4.1% |
| May 2025 | 5.4% | 3.9% | 4% |
| Jun 2025 | 5.3% | 3.9% | 4% |
| Jul 2025 | 5.1% | 4% | 4% |
| Aug 2025 | 5.4% | 4% | 4% |
| Sep 2025 | 5.5% | 4.1% | 4% |
| Oct 2025 | 5.2% | 4% | 3.9% |
| Nov 2025 | 5.3% | 3.9% | 3.9% |
| Dec 2025 | 5.3% | 4% | 3.9% |
| Jan 2026 | 5.2% | 3.9% | 3.9% |
| Feb 2026 | 5.3% | 3.9% | 3.9% |
| Mar 2026 | 5.2% | 4% | 3.9% |
| Apr 2026 | 4.6% | 4% | 3.9% |
| May 2026 | 4.8% | 4% | 3.9% |
| Jun 2026 | 5% | 4% | 4% |
| Jul 2026 | 4.9% | 4.1% | 4% |
For insured loans, the 3-to-5-year bucket ran slightly above the 5-year-and-over bucket until mid-2025 and slightly below it from August 2025, while short terms stayed well above both. For uninsured borrowers the difference to the 5-year bucket was bigger: 4.08% vs 4.49% in July 2026.
How the rate is set
Four-year fixed rates are funded and priced off medium-term money: Government of Canada bond yields between three and five years, plus the lender's spread. The 5-year yield we track rose from 2.67% at the end of February 2026 to 3.69% at the end of September before easing to 3.60% on October 2. When yields climb like that, medium-term fixed rates tend to drift upward a few weeks later, which is what the new-loan averages show from April to July 2026.
Insured vs uninsured
Default insurance, required when you put down less than 20%, protects the lender rather than you, which lets lenders offer insured mortgages at lower rates. In the 3-to-5-year bucket that advantage was small in July 2026 (0.09 points). An uninsured borrower in this bucket was paying about 0.4 points less than the uninsured 5-year-and-over average.
Penalties, prepayment and renewal
For a closed 4-year fixed, the usual penalty for breaking early is the greater of three months' interest or the interest rate differential (IRD). The IRD depends on how far rates have fallen and how much time is left, so breaking in the first year or two can be costly if rates have dropped. Yearly prepayment allowances (a lump sum or a payment increase) reduce the balance without penalty up to the lender's limit.
When the term ends, you can renew or move. Federally regulated lenders must send the renewal statement at least 21 days before maturity. A straight switch to a new lender at renewal generally no longer requires the stress test (since November 2024). For a new mortgage, qualification uses the greater of your rate plus 2 points or 5.25%.
Worked example: $640,000 over 25 years
An uninsured buyer borrowing $640,000 (for example, 20% down on $800,000) at the July 2026 uninsured 3-to-5-year average:
| Item | Amount |
|---|---|
| Rate | 4.08% |
| Monthly payment | $3,394 |
| Interest paid over 4 years | $98,616 |
| Balance at renewal, after 4 years | $575,687 |
| Stress-test qualifying rate | 6.08% |
| Payment used to qualify | $4,125 |
For comparison, the same loan at the 1-to-3-year uninsured average (5.31%) would cost $3,836 a month, about $440 more. Figures use semi-annual compounding.
Try our mortgage calculator to see your own numbers with current Bank of Canada averages.
Related reading
Compare the 3-year fixed and 5-year fixed, or the 5-year variable. Lender pages: TD, Scotiabank, Tangerine.
FAQ
What is the average 4-year fixed mortgage rate in Canada?
There's no 4-year-only average. The Bank of Canada's closest figure, for fixed terms of 3 to less than 5 years, was 3.99% insured and 4.08% uninsured in July 2026.
Is a 4-year fixed cheaper than a 5-year fixed?
In July 2026 the 3-to-5-year bucket averaged slightly less than the 5-year-and-over bucket for insured loans (3.99% vs 4.05%) and clearly less for uninsured loans (4.08% vs 4.49%). Individual lenders' 4- and 5-year rates can differ either way.
Why do so few people choose a 4-year term?
The 5-year has long been the default product that lenders advertise and borrowers ask for. The 4-year is mainly used to match a renewal to a planned sale, refinance or other mortgage.
Can I renew a 4-year mortgage into a different term?
Yes. At renewal you can pick any term your lender offers, or switch lenders, and the new term doesn't need to match the old one.
Rates shown are Bank of Canada averages, not offers. Talk to a licensed mortgage professional before choosing a term.
Dibz is a home search app for the Greater Toronto Area, built on the live TRREB MLS® feed. We write these guides from what we see in the market every day and check every rule and number against official sources, listed at the end of each article. Charts marked "Dibz analysis" are calculated from active MLS® listings on the date shown.
Keep reading
1-year fixed mortgage rates in Canada (2026): how they work
How 1-year fixed mortgage rates in Canada are priced, posted vs actual rates from Bank of Canada data, who a 1-year term suits, penalties and a payment example.
10-year fixed mortgage rates in Canada (2026): the long lock
10-year fixed mortgage rates in Canada: how they price against the 5-year, what a decade-long rate costs, the year-five penalty rule and a payment example.
2-year fixed mortgage rates in Canada (2026): what to know
2-year fixed mortgage rates in Canada: how they price against 1- and 3-year terms, insured vs uninsured averages, penalties, renewal and a payment example.