Compare current 4-year mortgage rates from Canada's top lenders. Medium-term mortgage solutions with competitive rates.
Four-year mortgage terms are an often-overlooked but increasingly relevant option for Canadian homeowners seeking a mix of long-term stability and near-future flexibility. A 4-year term provides more predictability than shorter terms like 1- to 3-year mortgages but allows you to reassess and refinance sooner than a traditional 5-year commitment. In this article, we’ll dive deep into 4-year mortgage rates in Canada, explore current rate trends for 2025, identify the types of borrowers best suited to this term, and share insights on how to get the best possible deal. We'll also break down costs, explain the differences between fixed and variable options, and cover what happens at renewal time.
A 4-year mortgage is a home loan agreement where the interest rate and conditions are fixed or variable for four years. At the end of this term, borrowers must renew their mortgage, either with the current lender or a new one. This term provides a unique middle ground, offering a longer cushion than 1- to 3-year terms while maintaining more agility than a 5-year mortgage contract.
Choosing a 4-year term can be especially helpful during uncertain economic periods. If you're concerned about rate volatility but not ready to lock in for five years, this option lets you hedge against immediate increases while retaining some flexibility to adjust sooner. Fixed-rate 4-year mortgages ensure stable payments throughout the term, while variable-rate options can offer savings if interest rates fall—but they come with higher risk.
This term can be a strategic choice for borrowers planning to make financial changes in the medium term—such as selling, refinancing, or upgrading. However, you’ll want to be mindful of penalties for early termination and any fees involved in switching lenders later.
As of 2025, average 4-year fixed mortgage rates in Canada range from 4.95% to 5.4%, depending on the lender, your credit profile, and whether the loan is insured. These rates are slightly lower than many 2- and 3-year terms but typically a bit higher than the most competitive 5-year offerings.
The Bank of Canada’s cautious stance on inflation has kept mortgage rates relatively high compared to pre-2022 levels. Although inflation is easing, central bank policy remains conservative, keeping short- and mid-term rates elevated. Borrowers are now seeking intermediate-term options like the 4-year to avoid locking in long-term high rates while still maintaining some protection against volatility.
Lenders sometimes offer promotional rates on 4-year mortgages to attract borrowers looking for something different from the standard 5-year model. These promos might come with stricter prepayment conditions or bundled product requirements, so be sure to read the fine print.
Key economic influences on current 4-year mortgage rates include:
Staying informed about macroeconomic shifts will help you determine whether now is the right time to lock in a 4-year term.
A 4-year mortgage is ideal for homeowners seeking a balance between stability and flexibility. If you’re planning a move, financial shift, or renovation in four to five years, this term can help avoid breaking a longer mortgage early, which might come with penalties.
This term is also appealing if you believe interest rates will drop modestly in the next 2–3 years but not drastically enough to warrant a short-term gamble. It gives you time to wait out rate volatility without locking into a possibly outdated rate until the end of a 5-year cycle.
Professionals in contract-based work or early career stages may benefit from this option, as it provides enough time to settle into their roles while maintaining a degree of financial flexibility. Real estate investors who plan to sell or refinance after property improvements may also appreciate the timeline that aligns well with typical investment cycles.
Borrowers who dislike frequent renewals but aren’t ready for the full commitment of a longer-term mortgage may find this to be the perfect compromise. Just make sure the features, such as prepayment privileges and penalties, align with your projected plans.
To secure the most favorable 4-year mortgage rate, preparation is key. Lenders base their rate offers on your credit score, employment history, income stability, existing debt, and loan-to-value ratio.
Start by checking and improving your credit score. Aim for 720 or above to unlock the best available rates. Keep your debts low, pay bills on time, and avoid taking on new loans or credit cards before applying for a mortgage.
A higher down payment will reduce your loan-to-value ratio, which may help you qualify for lower rates. If you can manage at least a 20% down payment, you’ll also avoid mortgage insurance premiums, which add to your overall costs.
Use mortgage comparison websites to view real-time rates from various lenders. Don’t forget to include credit unions and online lenders in your search—they often offer competitive or promotional rates for niche terms like 4-year mortgages. Mortgage brokers are another valuable resource, as they have access to exclusive rates and can negotiate on your behalf.
Finally, examine the full mortgage package. Look for features such as flexible prepayments, low renewal fees, and transparent penalty terms. Sometimes a slightly higher interest rate with better features will save you more in the long run.
Both fixed and variable rates are available for 4-year mortgage terms, and each comes with its own risks and benefits.
A fixed-rate mortgage provides stability by locking in your interest rate for four full years. Your payments will stay the same throughout the term, which makes budgeting predictable and protects you from potential interest rate hikes. This is ideal if you want peace of mind and expect rates to rise.
A variable-rate mortgage, on the other hand, fluctuates with your lender’s prime rate. If the Bank of Canada lowers interest rates, your payments could decrease, leading to savings over time. However, if rates increase, so could your payments—unless you have a fixed-payment variable mortgage, which shifts the interest/principal mix instead.
In 2025, the fixed-rate 4-year mortgage remains the preferred choice for many due to rate volatility. However, for financially secure borrowers who expect rates to decline, a variable option could offer long-term benefits. Consider your risk tolerance, income flexibility, and market outlook when choosing between the two.
Understanding the full cost of your mortgage goes beyond the advertised interest rate. Here’s a breakdown of potential costs over a 4-year term:
Suppose you have a $400,000 mortgage at a 5.1% fixed interest rate. Over four years, you may pay approximately $81,600 in interest, depending on the amortization schedule. Monthly payments might fall between $2,200 and $2,700 depending on term specifics.
Other common costs include:
If there’s a chance you’ll sell or refinance early, ensure your mortgage offers favorable prepayment conditions or portability options.
When your 4-year mortgage comes to an end, you’ll need to either renew it with your current lender or switch to a new one. Start this process about 90 to 120 days before the term ends to give yourself enough time to shop around.
Your lender will likely send a renewal offer, but this might not be their best rate. Use this as leverage to negotiate, and don’t hesitate to explore other institutions. Mortgage brokers can help you secure a better renewal deal if your credit profile has improved or if market conditions are favorable.
Reassess your financial position before renewing. Consider whether your income, expenses, or life goals have changed. If you’re planning to move, retire, or renovate, a shorter or longer term may now be a better fit.
If switching lenders, account for potential administrative and legal costs. Some lenders will absorb these costs to win your business, so be sure to ask.
A 4-year mortgage is best for borrowers who want a middle-of-the-road approach. It offers a reasonable level of payment security with greater flexibility than longer terms.
Choose a 4-year mortgage if:
Choose a longer term if:
In contrast, choose a shorter term if you believe rates will fall soon and are comfortable with renegotiating more frequently.
Can I break a 4-year mortgage early?
Yes, but you may face penalties depending on the lender and mortgage type.
Are 4-year rates usually higher than 5-year rates?
Sometimes, especially if lenders are using promotions to attract borrowers to 5-year terms.
Can I switch lenders at the end of 4 years?
Yes, and it’s a great time to compare rates and negotiate a better deal.
Is mortgage insurance required for 4-year mortgages?
Only if your down payment is under 20%.
What if I want to refinance before the 4 years are up?
You may incur prepayment penalties. Check your mortgage terms or consult your lender.
Experts predict rates could begin easing in late 2025 or early 2026 if inflation continues to decline and the economy stabilizes. Choosing a 4-year term now could help borrowers avoid locking in at the peak, while giving them flexibility to refinance sooner if the outlook improves.
That said, market uncertainty remains. Stay up to date on interest rate forecasts and central bank policy. Review your mortgage annually to ensure your strategy aligns with your financial goals.
A 4-year mortgage can be a strategic choice for Canadian homeowners seeking a smart balance between rate stability and medium-term flexibility. Whether you’re navigating career transitions, planning a renovation, or watching for future rate drops, this term provides a useful middle path.
Always compare lenders, calculate total costs, and align your mortgage term with your personal and financial plans. A well-chosen 4-year term can offer protection, adaptability, and long-term value.
Ready to compare the best 4-year mortgage rates in Canada? Use our mortgage comparison tool at the top of this page to explore real-time offers from top lenders. For personalized guidance, speak with a licensed mortgage broker today.