Rates · fixed
7-Year Fixed Mortgage Rate
A 7-year fixed mortgage rate locks your interest rate and payment for seven years, priced from Government of Canada bond yields and lender margins..
A 7-year fixed mortgage rate is the interest rate on a closed mortgage whose rate is locked for seven years, so the principal-and-interest payment does not move when the Bank of Canada changes its policy rate. It is priced from Government of Canada bond yields at comparable maturities, plus the lender's funding spread and margin, then adjusted for competition — there is no single official seven-year number.
How the rate is determined
Fixed mortgage pricing starts in the bond market. Lenders fund fixed-rate loans largely by matching them against term debt, so the yield on Government of Canada bonds with a similar maturity is the main input. A seven-year rate sits between the heavily traded five-year and ten-year Government of Canada benchmarks, and moves with inflation expectations, expectations for the policy interest rate, and global demand for Canadian debt.
On top of that benchmark, a lender adds a spread for its own funding costs, operating costs, and profit target, then publishes a posted rate. Most borrowers are actually offered a discounted rate below posted, and the size of that discount varies by lender, by borrower profile, and by how much the lender wants the business at that moment.
Longer terms normally carry a term premium: the lender commits funds for longer and takes on more interest-rate risk, so the rate usually sits above a shorter fixed term. That is not automatic. The yield curve can flatten or invert, and in those periods a seven-year rate can be level with or below a five-year rate. The prime rate and the Bank of Canada's policy rate shape variable-rate pricing and short-term funding, but they are not the direct driver of a seven-year fixed rate. For the full chain from policy rate to contract rate, see the guide on how mortgage rates work in Canada.
Published benchmarks help with context, not with offers. The Bank of Canada releases conventional mortgage rate series compiled from chartered bank posted rates, and Statistics Canada publishes chartered bank interest rates that include mortgage lending rates. These measure what institutions post rather than what any individual borrower is quoted. Check the current figures at the source.
The stress test on top
For federally regulated lenders, the qualifying rate is set higher than the contract rate. Under OSFI's residential mortgage underwriting guidance, a borrower generally must qualify at the greater of the contract rate plus a prescribed buffer and a published floor rate. The practical result is that a seven-year fixed rate may be tested at a rate the borrower never actually pays. Confirm the current buffer and floor with OSFI or the lender, and model payments at both the contract rate and the qualifying rate with the stress test calculator. Provincially regulated credit unions may operate under different rules.
Who a seven-year fixed term suits
This term fits borrowers who want payment certainty that stretches past the usual five-year cycle: households on a tight fixed budget, buyers confident they will stay in the property well beyond seven years, and borrowers who would rather not renegotiate twice inside that window. It is less suited to anyone who may sell, relocate, refinance, or substantially prepay within the term, because exit costs on a long fixed mortgage can be substantial. It also does not suit a borrower who expects rates to fall and wants to capture that drop.
How it compares with adjacent fixed terms
| Term | Rate relationship | What you trade |
|---|---|---|
| 1-year fixed | Usually carries the smallest term premium, though not always | Least lock-in, but re-priced every year and exposed to renewal risk repeatedly |
| 3-year fixed | Middle of the curve | Shorter certainty and more frequent renewals |
| 5-year fixed | The most common Canadian term and the usual comparison point | Balanced certainty; one renewal inside a decade |
| 7-year fixed | Above or near the five-year depending on the shape of the yield curve | Longer certainty, fewer renewals, more exposure if you break it |
| 10-year fixed | Typically the largest term premium | Maximum certainty and usually the least flexibility |
Against a variable-rate mortgage, a seven-year fixed buys certainty at the cost of giving up any benefit if rates fall. The fixed vs variable guide walks through that trade-off in more detail.
Renewal and breaking the term early
At maturity you can renew with the same lender, switch to another, or pay the balance off. If you take no action, many lenders roll the mortgage into a new term automatically, often at a posted rate rather than a negotiated one, so it pays to start the renewal process well before the maturity date.
Breaking a fixed mortgage before maturity usually triggers a prepayment charge based on the greater of three months' interest or the interest rate differential. IRD compares your contract rate with the lender's current rate for a similar term and can be large when market rates have fallen. Because a seven-year term is long, the remaining-term side of that calculation has more time to run. See the IRD guide before committing.
What to check before choosing
- Whether the quoted figure is a posted or discounted rate, and whether the discount is held through closing.
- The exact prepayment charge formula and how the lender computes the interest rate differential.
- Prepayment privileges, portability, and whether the mortgage is registered as a collateral charge.
- Whether the lender is federally regulated, which affects the stress test, or a provincially regulated credit union.
- Whether your plans could change within seven years — a sale, a move, a renovation refinance, or a lump-sum payoff.
- Payments modelled at the contract rate and at the qualifying rate.
Frequently asked questions
Is a 7-year fixed mortgage rate higher than a 5-year fixed rate?
Not necessarily. Longer terms usually carry a term premium, because the lender commits funds for longer, so a seven-year rate often sits above a five-year. But the Government of Canada yield curve can flatten or invert, and in those periods a seven-year rate can be level with or below a five-year. Compare live quotes rather than assuming the order.
What happens if I break a 7-year fixed mortgage early?
Most lenders charge the greater of three months' interest or the interest rate differential. On a long fixed term the remaining-term calculation has more time to run, so the charge can be significantly larger than on a shorter term if market rates have fallen. Ask for the exact formula and a written penalty estimate before you sign.
Does the mortgage stress test apply to a 7-year fixed mortgage?
Yes, if the lender is federally regulated. The borrower must generally qualify at the greater of the contract rate plus a prescribed buffer and a published floor rate, so the qualifying rate is higher than the rate actually paid. Provincially regulated credit unions may follow different rules. Confirm the current buffer and floor with OSFI or your lender.
Should I pick a 7-year fixed or a 5-year fixed term?
It depends on how long you expect to keep the property, how much payment certainty you want, and how likely a sale or refinance is within seven years. A five-year term re-prices sooner but keeps your exit options closer. A seven-year term avoids a second negotiation but raises breakage exposure. General information only — weigh it against your own plans.