TD mortgage rates are the interest rates offered by TD Canada Trust on its home loan products, which include both fixed and variable rate options. These rates are a key component of mortgage affordability for Canadian homebuyers and homeowners seeking to renew or refinance. The posted rates, along with the Annual Percentage Rate (APR), help borrowers understand the full cost of borrowing. TD's mortgage prime rate, a benchmark for variable-rate products, directly influences payments and long-term financial planning.
Understanding TD's Posted Rates and Annual Percentage Rate
TD Canada Trust advertises posted mortgage rates for various terms, which serve as a starting point for borrowers. Examples of these posted rates include a one-year fixed closed rate of 5.69% and a two-year fixed closed rate of 5.39%. It is crucial to distinguish between the posted interest rate and the Annual Percentage Rate (APR). The APR represents the total cost of borrowing expressed as a percentage, incorporating interest and applicable fees such as property valuation fees. For instance, the APR for a one-year fixed closed mortgage is 5.789%, which is higher than its posted rate of 5.69%. The APR calculation provided by TD is based on a $300,000 mortgage with a 25-year amortization. This figure is not used to calculate regular payments but provides a standardized metric for comparing the true cost of different mortgage offers. Understanding this difference helps borrowers make more informed financial decisions when evaluating loan options.
Fixed Rate and Variable Rate Mortgage Options
TD offers both fixed and variable interest rate mortgages, each with distinct characteristics. A fixed interest rate mortgage provides payment stability, as the interest rate and the resulting principal and interest payments remain unchanged for the entire selected term. Borrowers can choose from term lengths including 6 months, 1, 2, 3, 4, 5, 6, 7, or 10 years. This option is suited for those seeking predictable budgeting over the medium to long term. In contrast, a variable interest rate mortgage is based on the TD Mortgage Prime Rate, which is currently 4.60%. The interest rate on a variable mortgage can fluctuate up or down over the loan term in response to changes in this prime rate. While the total monthly payment typically remains constant, the proportion of each payment allocated to principal versus interest will vary. If interest rates rise significantly, more of the payment goes toward interest, which can affect the loan's paydown speed. The choice between fixed and variable rates involves weighing the security of a locked rate against the potential savings of a variable rate that may decrease.
The Impact of Insured versus Uninsured Mortgages on Rates
The size of a borrower's down payment determines whether a mortgage is classified as insured or uninsured, which directly affects the interest rate offered. An insured, or high-ratio, mortgage requires the purchase of mortgage default insurance from providers like CMHC. This insurance protects the lender against borrower default and is mandatory for purchases with a down payment of less than 20% of the home's purchase price. Because the lender's risk is reduced, insured mortgages typically qualify for the lowest interest rates. However, the borrower must pay an insurance premium, which is added to the total mortgage amount. As of October 2026, competitive rates for high-ratio mortgages in Canada include a 5-year fixed rate of 4.34% and a 5-year variable rate of 3.43%. An uninsured, or low-ratio, mortgage is one where the down payment is 20% or more. All mortgages for homes costing $1.5 million or more, refinances, and rental properties are uninsured. Since the lender assumes more risk without insurance, uninsured mortgages generally come with higher interest rates. Borrowers do not pay a mortgage insurance premium with an uninsured loan, but they may face a slightly higher interest cost as a result.
Key Mortgage Features and Borrower Protections
TD mortgages come with several standard features designed to offer flexibility and protection. One significant feature is the rate hold. Once a borrower obtains a TD Mortgage Pre-Approval, the interest rate for the selected term can be held for 120 days, even if market rates increase during that period. This hold only applies to fixed-rate mortgages, as variable rates can fluctuate. TD also offers flexible payment options on closed mortgages, allowing borrowers to make a lump-sum prepayment of up to 15% of the original principal amount annually without incurring a penalty. On an open mortgage, borrowers can prepay 100% of the principal at any time without charge. Additionally, borrowers can request to skip the equivalent of one monthly mortgage payment if needed. For those seeking to leverage home equity, the TD Home Equity FlexLine provides a revolving line of credit secured by the property, often featuring a lower interest rate than unsecured credit products. TD also offers optional TD Mortgage Protection insurance, which can reduce or pay off the outstanding mortgage balance in the event of the borrower's death or a covered critical illness.
Common mortgage features include flexible payment options. Borrowers can pay up to 15 percent of the principal amount on a closed mortgage annually without prepayment charges, or 100 percent on an open mortgage. They can also request to skip the equivalent of one monthly payment if needed. TD offers a rate hold for pre-approved fixed rate mortgages, locking in the interest rate for up to 120 days. Furthermore, borrowers can consider optional TD Mortgage Protection insurance to cover the outstanding balance under certain circumstances.
- 120-day rate hold on fixed-rate pre-approvals.
- Annual prepayment of up to 15% of principal on closed mortgages.
- Ability to skip one monthly payment per year upon request.
- Optional Mortgage Protection insurance for death or critical illness.
- Home Equity FlexLine as a secured borrowing alternative.
- Standard 25-year amortization, extendable to 30 years for uninsured mortgages with a rate premium.
How Economic Factors Influence TD Mortgage Rates
TD mortgage rates are not set in isolation. They are influenced by broader economic conditions and central bank policy. The Bank of Canada's overnight interest rate target is a primary driver for variable mortgage rates. Lenders' prime rates, including TD's Mortgage Prime Rate, move in correlation with changes to the overnight rate. As of September 2, 2026, the Bank of Canada has held its overnight rate at 2.25% for a seventh consecutive time, contributing to stability in variable mortgage rates. Fixed mortgage rates, however, are more closely tied to the yields on 5-year government bonds. When investors expect inflation to remain high, bond yields tend to rise, prompting lenders like TD to increase their fixed mortgage rates. The current inflation rate in Canada is 3%, influenced by factors such as higher energy prices and tariffs. The Bank of Canada weighs this inflation against risks from prolonged trade conflicts when making its rate decisions. Its next scheduled interest rate announcements are set for October 28, 2026, and December 9, 2026. These announcements do not directly set mortgage rates but are critical events that can cause immediate adjustments in lenders' prime rates and influence bond market movements.
Comparing Rates and Understanding Discounts
The posted mortgage rates advertised by TD are often not the final rate a borrower will pay. Many borrowers qualify for discounted rates based on specific factors such as their credit score, the size of their down payment, the mortgage type, and whether they are purchasing a new home, renewing, or switching lenders from another institution. Rate comparison websites often display these discounted offers, which is why the 'best available rates' can be significantly lower than a lender's official posted rate. For example, a borrower might be offered a variable rate at 'prime minus 0.83%' rather than the full prime rate. The distinction between an adjustable-rate mortgage and a variable-rate mortgage also affects payments. With a TD variable-rate mortgage, the payment amount stays constant when the prime rate changes, but the allocation between principal and interest shifts. In an adjustable-rate mortgage, the payment amount itself would increase or decrease with each change in the interest rate. When comparing offers, borrowers should focus on the APR for a true cost comparison and consider both the discounted rate and the terms and conditions attached to it. The rates displayed on comparison platforms are personalized based on the details you enter, and adjusting your down payment amount will automatically update the rates to show insured or uninsured options.
Key factors affecting the rate a borrower qualifies for include the size of the down payment. A down payment below 20 percent results in an insured mortgage, which typically qualifies for lower interest rates. A down payment of 20 percent or more results in an uninsured mortgage, which generally comes with higher rates. Other factors are the mortgage type, such as fixed or variable, and the borrower's credit profile. The specific term length chosen, from six months up to ten years, also influences the offered rate.
- Credit history and credit score.
- Down payment amount (affecting insured vs. uninsured status).
- Mortgage term and type (fixed vs. variable).
- Transaction type (purchase, renewal, or switch).
- Property type (primary residence, rental, or investment).
- Loan-to-value ratio.
- Relationship with the financial institution.
Current Rate Environment and Outlook for 2026
The mortgage rate landscape in 2026 is characterized by uncertainty following a period of stability. The Bank of Canada has held its policy rate steady, which has kept variable rates stable. However, inflation remains at 3%, above the Bank's 2% target, driven by external factors like energy prices and tariffs. This persistent inflation creates upward pressure on bond yields, which can lead to increases in fixed mortgage rates. The trade-off between controlling inflation and supporting economic activity means further interest rate cuts in 2026 remain possible but are not guaranteed. For borrowers, this environment underscores the importance of understanding rate hold features when securing a pre-approval. A 120-day rate hold on a fixed-rate mortgage can provide valuable protection against potential rate increases during the home search process. The upcoming Bank of Canada announcements in October and December 2026 will be critical indicators for the future direction of both variable and fixed rates. Borrowers should monitor these developments as they make decisions about locking in a fixed rate or opting for a variable rate mortgage.
Frequently asked questions
What is the difference between TD's posted rate and the APR?
TD's posted rate is the advertised interest rate for a mortgage term, such as 5.69% for a one-year fixed closed mortgage. The Annual Percentage Rate (APR) includes the interest rate plus applicable fees, like property valuation fees, to show the total cost of borrowing. For the same one-year mortgage, the APR is 5.789%. The APR is calculated based on a standard $300,000 mortgage with a 25-year amortization and provides a more complete figure for comparison, though it is not used to calculate your regular monthly payments.
How long can TD hold a mortgage rate for me?
TD offers a 120-day rate hold for customers who obtain a TD Mortgage Pre-Approval. This means the interest rate for your selected fixed-rate mortgage term is locked in and will not increase for up to 120 days, even if general market rates rise during that period. This rate hold applies only to fixed-rate mortgages, as variable rates can fluctuate with changes to TD's Mortgage Prime Rate. The hold is subject to all standard mortgage approval conditions being met.
What prepayment options are available with a TD mortgage?
TD offers flexible prepayment options on its mortgages. For a closed mortgage, you can make an annual lump-sum prepayment of up to 15% of the original principal amount without facing a prepayment charge. For an open mortgage, you can prepay 100% of the principal at any time without penalty. Additionally, borrowers can request to skip the equivalent of one monthly mortgage payment per year if needed, providing flexibility during financial changes.
Does a larger down payment get me a better rate from TD?
Yes, a larger down payment can influence the mortgage rate you qualify for. A down payment of 20% or more results in an uninsured mortgage, which typically carries a higher interest rate because the lender assumes more risk. A down payment below 20% requires mortgage default insurance, creating an insured mortgage. Insured mortgages often qualify for lower interest rates because the lender's risk is mitigated by the insurance, though the borrower must pay an insurance premium added to the loan amount.
How does the Bank of Canada interest rate affect TD mortgage rates?
The Bank of Canada's overnight rate target directly influences TD's Mortgage Prime Rate, which is the basis for variable-rate mortgages. When the Bank changes its policy rate, TD's prime rate typically adjusts accordingly, causing variable mortgage payments to be reallocated between principal and interest. Fixed mortgage rates are more influenced by 5-year government bond yields, which react to inflation expectations and economic outlook. As of September 2026, the Bank has held its rate at 2.25%, contributing to stability in variable rates.
What is TD's mortgage prime rate?
TD's mortgage prime rate is a benchmark interest rate used to set pricing for variable-rate mortgages and home equity lines of credit. As of 2026, TD's mortgage prime rate is 4.60%. This is distinct from the TD prime rate of 4.45%. The mortgage prime rate moves in correlation with decisions made by the Bank of Canada regarding its overnight rate. A variable mortgage rate is often expressed as 'prime minus' or 'prime plus' a certain percentage, determining the borrower's actual interest cost.
Sources and further reading
- Mortgages Rates, TD Canada Trust td.com
- Find the best 5-year variable mortgage rates in Canada ratehub.ca
This article explains how things work and is not financial, tax or legal advice. Rules, limits and rates change, so check the current figures with the Canada Revenue Agency, your province or your financial institution before you act.