Buying a house in Canada right now feels like a high-stakes poker game where the dealer keeps changing the rules. You're looking at toronto dominion mortgage rates because, let's be real, TD is everywhere. They're one of the Big Six for a reason. But if you just look at the "posted rates" on their website and assume that's what you'll pay, you're basically leaving money on the sidewalk.
Honestly, the mortgage market in early 2026 is a weird beast. We're coming off a cycle where the Bank of Canada finally hit the "pause" button at 2.25%. Some people are breathing a sigh of relief, while others are terrified that the "neutral" rate is still too high for their budgets.
What the Heck is the Difference Between Posted and Special Rates?
If you walk into a TD branch on Bay Street or a suburban hub in Mississauga, you’ll see a giant sign with numbers like 6.09% for a 5-year fixed.
That is a lie.
Okay, it’s not a legal lie, but it’s a "posted rate." Think of it like the sticker price on a car at a dealership. Nobody actually pays that unless they really, really didn't do their homework. The toronto dominion mortgage rates you actually want are the "special offers" or "discounted rates."
Right now, for a 5-year fixed closed mortgage, TD's special rate is sitting around 4.79%. That’s a massive gap from the 6.09% posted rate. Why do they do this? It’s partly psychological—making you feel like you won a negotiation—and partly technical. High posted rates allow banks to charge much larger prepayment penalties if you break your mortgage early.
Current Snapshot of TD's Numbers (January 2026)
- 3-Year Fixed Closed: Currently around 4.64%. People love this right now because they don't want to be locked in for five years if rates drop further in 2027.
- 5-Year Fixed Closed: 4.79%. This is the "safe" bet for families who need to know exactly what their grocery budget is for the next half-decade.
- 5-Year Variable Closed: 4.39%. This is linked to the TD Mortgage Prime Rate, which is currently 4.60%.
Wait, did you catch that? TD actually has two prime rates. There’s the "TD Prime" (4.45%) used for things like HELOCs, and then there’s the "TD Mortgage Prime" (4.60%) specifically for variable mortgages. It’s a little quirk that makes TD slightly different from some other big banks.
The Variable Rate Gamble in 2026
Choosing a variable rate right now is basically a bet on Tiff Macklem and the Bank of Canada.
Most economists, including the folks at TD Economics, think the BoC is going to sit on its hands for most of 2026. They're watching inflation like a hawk. If inflation stays near that 2% sweet spot, rates might stay flat. But if U.S. trade tensions (which are a huge topic this year) cause prices to spike, we might even see a tiny hike late in the year.
If you take a variable rate at 4.39% today, you’re starting lower than the fixed rate. That feels good. But if the economy gets "hot" and rates go up, your payment—or at least the portion going to interest—increases.
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Variable-rate holders at TD have "fixed payments." This means even if the interest rate goes up, your monthly check to the bank stays the same. The catch? More of that money goes to the bank's pocket (interest) and less goes to your house (principal). If rates go up enough, you hit a "trigger point" where your payment doesn't even cover the interest anymore. That's a bad day.
Breaking the 5-Year Fixed Myth
Everyone tells you to get a 5-year fixed. It’s the Canadian tradition. But is it smart?
Right now, the yield on 5-year Government of Canada bonds—which dictates fixed mortgage rates—is hovering around 3%. The banks add their "spread" on top of that.
If you think the world is going to be more stable in 2028 than it is today, a 3-year term might be the move. You'll pay a slightly different rate (4.64% vs 4.79%), but you gain the flexibility to renew sooner if the market cools down.
The Hidden Trap: Prepayment Penalties
This is where toronto dominion mortgage rates can get expensive after you've already signed. If you get a fixed rate and need to sell your house in three years because of a job move or a divorce, TD will charge you a "Prepayment Charge."
For fixed rates, this is the higher of:
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- Three months of interest.
- The Interest Rate Differential (IRD).
The IRD is the killer. It’s calculated based on that "posted rate" we talked about earlier. Because the gap between posted and special rates is so wide, the IRD penalty can easily reach $15,000 or $20,000 on a standard Toronto mortgage. If you value flexibility, the variable rate is much friendlier because the penalty is almost always just three months of interest.
Cash Back and "Switch" Deals
TD is aggressive about stealing customers from RBC and Scotiabank.
As of early 2026, they have a "Switch" offer. If you move your mortgage from another bank to TD, they’re offering cash bonuses of up to $5,100.
- $1,000,000+ mortgage: $5,100 cash.
- $750,000 - $999,999: $4,100 cash.
- $500,000 - $749,999: $3,100 cash.
It sounds like a lot of money—and it is—but don't let a $3,000 check blind you to a rate that's 0.10% higher than a competitor. Over a five-year term, that 0.10% difference on a $600,000 mortgage will cost you way more than the cash bonus you got upfront.
Expert Insight: The Stress Test Still Matters
Even if you find a great rate, you still have to "stress test."
Currently, the stress test requires you to prove you could afford payments if the rate was 2% higher than what you're actually signing for, or 5.25%, whichever is higher. With current toronto dominion mortgage rates around 4.79%, you’re being tested at roughly 6.79%.
This is why many buyers in the GTA are still struggling to qualify, even though rates have come down from the 2023 peaks. Your income needs to be substantial to carry a million-dollar mortgage at these levels.
Actionable Steps for Your Next Move
If you’re serious about locking in a rate with TD, don't just click "apply" online.
First, get a pre-approval. This holds your rate for up to 120 days. If rates go up tomorrow, you're protected. If they go down, TD will usually give you the lower rate anyway.
Second, check your "privileges." TD typically allows you to pay down 15% of your original principal every year and increase your monthly payments by up to 100%. If you get a year-end bonus, throwing it at the mortgage is the best "investment" you can make.
Finally, negotiate. If a mortgage broker shows you a rate of 4.59% from a smaller lender like MCAP or First National, take that to your TD mortgage specialist. They have "discretionary pricing" power. They want your business because once they have your mortgage, they'll try to sell you credit cards, insurance, and investment accounts. Use that to your advantage to shave another 0.05% or 0.10% off the offer.
Start by gathering your last two years of T4s and a recent pay stub. Having your paperwork ready makes you a "clean" file, and mortgage specialists are much more likely to fight for a lower rate for a client who won't cause them administrative headaches.