Posted Rate

The posted rate is the official advertised mortgage interest rate published by a lender. Most borrowers do not pay the posted rate; they typically receive a discounted or special offer rate that is lower. Posted rates remain important for calculating prepayment penalties using the Interest Rate Differential (IRD) method and have historically been used as the benchmark for mortgage stress tests. Verify current lender practices and federal stress-test rules with a BC mortgage broker or licensed financial professional before acting.

Lenders use posted rates as a reference point for calculating prepayment penalties—specifically the IRD penalty when a borrower breaks a fixed-rate mortgage early. The higher posted rate (versus the discounted rate you actually received) can result in a larger penalty. Posted rates also serve as a regulatory benchmark; for example, federally regulated lenders historically used the Bank of Canada conventional five-year posted rate for mortgage stress testing (as of 2026-07-27 — verify current). Verify current federal stress-test requirements with the Financial Consumer Agency of Canada (FCAC) or a licensed mortgage professional before acting.

If you break a fixed-rate mortgage, many lenders calculate the prepayment penalty as the greater of three months' interest or an Interest Rate Differential (IRD). The IRD is typically the difference between your original contract rate and the lender's current posted rate (not the discounted rate offered to new borrowers) for a term similar to your remaining term, multiplied by your outstanding principal and time remaining. Because lenders use the higher posted rate in the IRD formula, penalties can be substantially larger than if discounted rates were used. Verify the exact prepayment penalty formula in your mortgage contract and consult a BC mortgage broker or lawyer before prepaying or breaking your mortgage.

No. Mortgage interest rates—including posted rates—are not set or regulated by the BCFSA. The BCFSA regulates mortgage brokers and certain other financial service providers under the Financial Institutions Act and Mortgage Brokers Act Regulation (as of 2026-07-27 — verify current), but does not control the interest rates lenders charge. Federally regulated banks and trust companies are overseen by the Office of the Superintendent of Financial Institutions (OSFI) and the Bank of Canada sets the policy interest rate, but individual posted rates are determined by each lender. Verify current mortgage rate disclosure and licensing requirements with the BCFSA or a BC mortgage broker before acting.

The federal mortgage stress test requires borrowers seeking an insured or certain uninsured mortgages to qualify at a rate higher than their actual contract rate, to ensure they can afford payments if rates rise. Historically, the benchmark was the Bank of Canada conventional five-year posted rate; as of June 1, 2021 (as of 2026-07-27 — verify current), the qualifying rate became the greater of the contract rate plus 2% (as of 2026-07-27 — verify current) or the conventional five-year posted rate. Verify the current federal stress-test rate and qualifying criteria with the Financial Consumer Agency of Canada (FCAC), the Office of the Superintendent of Financial Institutions (OSFI), or a licensed BC mortgage broker before applying for a mortgage.

Yes. The posted rate is the lender's advertised 'list price,' but most borrowers receive a discounted rate through negotiation, broker channels, or promotional offers. The spread between posted and discounted rates can be substantial—sometimes 1% to 2% or more (as of 2026-07-27 — verify current). Your actual rate depends on credit score, down payment, property type, insured versus uninsured status, and lender competition. Verify current market rates and your eligibility with a licensed BC mortgage broker or lender before committing to a mortgage.

BC credit unions are provincially regulated under the Financial Institutions Act and supervised by the BCFSA, whereas banks are federally regulated. Both may publish posted rates and offer discounted rates to borrowers, but prepayment penalty formulas, IRD calculation methods, and rate-setting practices can vary significantly between institutions. Some credit unions use a 'published rate' for IRD calculations that is closer to actual market rates, potentially resulting in lower penalties than banks that use higher posted rates. Verify the specific prepayment terms, rate structure, and penalty calculations in writing from your chosen lender or credit union before finalizing a BC mortgage.

Most federally regulated lenders (banks) use the posted rate—not your lower discounted contract rate—in the IRD penalty formula, which can significantly increase the penalty when you break your mortgage early. The IRD is generally calculated as the difference between your contract rate and the lender's current posted rate for a comparable term, applied to your remaining balance and term. Always review your mortgage contract's prepayment and penalty clauses carefully, and verify the exact IRD calculation method with your lender or a BC lawyer or mortgage broker before signing or breaking a mortgage.

Lenders publish posted rates on their websites, and the Bank of Canada publishes selected chartered bank conventional mortgage rates on its website (www.bankofcanada.ca). Posted rates change frequently and vary by lender, so check multiple sources. For the most competitive actual (discounted) rates available to you, consult a licensed BC mortgage broker who can compare offers across lenders. Verify current posted and discounted rates, and confirm all terms in writing, before committing to a mortgage.

BC does not have specific legislation mandating IRD formula disclosure in mortgage contracts; however, federally regulated financial institutions must comply with federal consumer protection rules under the Bank Act and Cost of Borrowing (Banks) Regulations, which require clear disclosure of borrowing costs and fees. The Financial Consumer Agency of Canada (FCAC) provides guidance on mortgage disclosures. In practice, prepayment penalty terms—including IRD calculation methods and whether posted or discounted rates are used—should be spelled out in your mortgage agreement. Verify prepayment penalty disclosure requirements and review your mortgage documents with a BC lawyer, notary, or licensed mortgage broker before signing.