Historical Mortgage Rates Chart

Learn more about the history of mortgage rates, and how they have evolved over time. These helpful graphs will demonstrate how the market and mortgage rate is adjusted throughout different economies.

Mortgage rates are constantly changing, especially at times when the economy is in turmoil, and seeing the rates start to climb can be concerning – you might ask yourself, should I buy now before they go even higher, or wait for them to fall again? You don’t want to overpay for your home, but delaying could mean missing out on the perfect property. 

While it’s impossible to completely predict what will happen next, we can use historical mortgage rates as a guide to add more context and information to your decision. Let’s take a look at the history of mortgage rates in Canada.

The History Of Mortgage Rates In Canada

Mortgage rates have varied a great deal over the past several decades. While rates are currently on the rise, which might make some buyers a little nervous about taking on a mortgage, it’s important to look at the broader historical context. In the early 1980s, for example, mortgage rates were almost 20%! So even though rates are starting to go up again after a period of relative stability, they’re still quite low by historical standards.

Here is a brief history of mortgage rates in Canada:

  • In the early 1980s, mortgage rates were around 18%
  • In the late 1980s and early 1990s, rates fell to around 12%
  • In the mid-1990s, rates fell to around 4%, and then rose again by the end of the decade to about 8%
  • In the early 2000s, rates dropped back down to around 5%
  • Since then, rates have remained relatively low, hovering around 5% or less in recent years

Keep in mind that these are just averages – specific rates may vary depending on your credit score and other factors. So if you’re thinking about buying a home soon, be sure to consult with a mortgage specialist to get an accurate rate quote for your particular situation.

What is the Historical Mortgage Rate in Canada?

Below, you’ll find a chart with a 30-year historical annual average prime rate in Canada:

The highest the prime rate was in this 30-year period was 8.60% in 1995, while the lowest was in 2020 at 2.70%.

What Are The Factors That Can Affect The Mortgage Rate?

There are many factors that can affect mortgage rates, such as:


For example, if the Bank of Canada raises interest rates, this will usually lead to higher mortgage rates. On the other hand, if the economy is struggling, mortgage rates might fall to encourage people to buy homes.

As stated above, there are also personal factors that can affect your individual mortgage interest rate, such as your credit score. So if you’re considering buying a home, it’s a good idea to check your credit score and get pre-approved for a mortgage before you start house hunting. This will give you a good idea of what kind of interest rate you can expect to pay.

How do Historical Mortgage Rates Affect Home Purchases?

Generally speaking, lower mortgage rates encourage home purchases because lower rates mean less interest paid overall. However, the cost of the home must also be taken into account. A higher-priced home with a lower interest rate can, in fact, save you money over the term of your mortgage.

Will Mortgage Interest Rates Go Down In 2023?

This is impossible to predict with 100% accuracy, as there are so many factors that can affect mortgage rates. However, if you’re considering buying a home in 2023, it’s a good idea to start tracking economic indicators now so you can get an idea of where rates might be headed. This way, you can plan your budget accordingly and make a more informed decision about when to buy.

Many potential home-buyers get worried when they see mortgage interest rates on the rise. It’s understandable – a higher interest rate means you’ll have to pay more for your home in the long run. 

However, it’s important to take a step back and look at the bigger picture before making any decisions. According to historical data, mortgage interest rates are still relatively low compared to where they’ve been in the past. So if you’re thinking about buying a home, now might be a great time to do it while interest rates are still comparatively low.  At Sterling Homes, we specialize in helping people find their perfect home. Give us a call today and we can start looking for homes that fit your budget and needs.


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