Choosing the Right Mortgage in Vancouver: Fixed vs. Variable and Down Payment Tips

Vancouver’s housing market can be overwhelming for buyers. In Greater Vancouver the average home price recently topped about $1.25 million, so down payments and mortgages are very large. Even a typical condo at ~$762,000 needs tens of thousands of dollars down (5% on the first $500K plus 10% on the remaining ~$262K). This Vancouver homebuyers guide will help you understand Vancouver mortgage rates, fixed vs. variable mortgages, down payment requirements in BC, and how to choose and get approved for the right mortgage. Along the way we’ll point out programs and tips – from mortgage pre-approval to first-time buyer incentives – to save you money and stress.

Vancouver Mortgage Market Overview

As of late 2025, Vancouver mortgage rates are very competitive. For example, the lowest 5-year fixed rate in Vancouver is about 3.69% and the lowest 5-year variable rate is about 3.70%. Local lenders in Vancouver compete hard for borrowers, so rates here are roughly on par with those in Toronto. The main difference is which lenders operate in BC – there are credit unions and mortgage brokers unique to Vancouver’s market. In practice, even small rate differences matter: a 0.2% lower rate on a $1,000,000 mortgage saves nearly $2,000 a year in interest. That means shopping around can save thousands over a 5-year term.

Because Vancouver homes are expensive, planning ahead is crucial. For example, at a $1.17 million average home price, a 20% down payment is about $235,000. Luckily, Vancouver buyers have options: we’ll explain the fixed vs variable mortgage choice, outline BC’s down payment requirements, and cover key steps like getting mortgage pre-approval in Vancouver.

Fixed vs Variable Mortgage

One of the first decisions for Vancouver homebuyers is fixed vs variable mortgage. With a fixed-rate mortgage, your interest rate and monthly payment stay the same for the term. By contrast, a variable-rate mortgage is tied to the lender’s prime rate, so your rate (and payment) can go up or down over time. Variable rates often start a bit lower than fixed rates because the lender takes on interest-rate risk. For example, during 2024 Vancouver’s 5-year variable rates were actually higher than fixed rates, but in early 2025, central bank rate cuts narrowed the gap significantly.

Which is better depends on your situation. If you value certainty, a fixed mortgage locks in today’s rate (currently mid-3% for 5-year terms) so you know your payment won’t change. If you can handle some risk and think rates may fall further, a variable mortgage might save interest in the future. If interest rates are low and are not expected to fall, a fixed rate is usually advised; but if you expect interest rates to fall, a variable rate may let you benefit from lower costs. In either case, consider the term length (5 years is common) and the amortization (usually up to 25 years) to match your budget.

Down Payment Requirements in BC

British Columbia follows Canada’s mortgage rules for minimum down payments. In short, you must pay:

5% of the price on the first $500,000,
5% of the first $500,000 plus 10% on the portion above $500,000 (up to $1.5 million), and
20% of the purchase price for homes $1.5 million or more.

For example, a $750,000 house requires $25,000 (5% of $500K) plus $25,000 (10% of the remaining $250K), totalling $50,000 down. In BC the practical effect is that if you buy a home worth $1 million or more, you’ll need 20% down to avoid high-ratio mortgage insurance. Vancouver’s average prices mean many buyers plan on 20%. For instance, a $1.2 million property needs at least $240,000 (20%) as the minimum down. (Condo buyers at ~$762K would have a lower minimum: 5% on $500K + 10% on $262K = ~$51,000.)

If your down payment is less than 20%, lenders will require mortgage insurance. That costs a premium (typically 2.8–4% of the mortgage) which is added to your loan. It’s wise to save as much down as you can. In fact, some suggest common goals: 20% or more to lower your monthly payment and avoid insurance, 10–15% if you can, or 5–10% if you’re a first-time buyer with limited savings. More down means less interest paid over time.

Sources for your down payment: In BC you may draw on several places to build that cash. A popular one is the Home Buyers’ Plan (HBP) which lets you withdraw up to $60,000 from your RRSP (per person) tax-free for a down payment. Gifts from family are also common to help meet your down payment goal. Some buyers borrow temporarily from a line of credit (HELOC) against another property or savings to fund the down payment. The table below lists the main down payment sources and programs:

RRSP Withdrawal (Home Buyers’ Plan): Pull up to $60,000 tax-free per person from registered retirement savings to use as a down payment.
Family Gift: A cash gift from a relative can count toward your down payment (no repayment required).
Personal Savings: Savings, investments or the sale of other assets.
Borrowing (HELOC or Loan): Temporary line of credit against existing equity to fund the down payment.
Other Home Sales: Proceeds from selling your current home.

Keeping track of BC’s down payment requirements is key. Your minimum has to meet the above rules, but the optimal down payment depends on your goals. For Vancouver buyers, aiming for at least 20% often makes sense to avoid mortgage insurance and lower interest costs.

Mortgage Pre-Approval in Vancouver

Before you start serious house-hunting, get mortgage pre-approved. A mortgage pre-approval means a lender (or broker) has reviewed your income, debts, credit and down payment, and issued a conditional approval for a certain loan amount and rate. In Vancouver’s competitive market, pre-approval does two big things: it tells you exactly how much you can borrow (fixing your budget), and it shows sellers that you’re a serious, financed-ready buyer. In fact, most agents advise buyers to get pre-approved first, even before choosing a realtor.

Key steps for pre-approval: Gather your financial documents in advance. Lenders will ask for photo ID, recent pay stubs or tax returns, bank/investment statements (to prove your down payment funds), and details of any debts (student loans, car payments, credit cards). A mortgage broker or bank can often complete pre-approval in just a day or two if you have everything ready. Shopping around before your actual mortgage gives you a chance to compare rates and terms. Once approved, your rate is usually held (guaranteed) for 90–120 days, giving you time to find a home.

Pre-Approval Tips: A few rules will help ensure your pre-approval stays valid. First, only apply for what you can comfortably afford – just because a lender says you qualify for a high amount doesn’t mean you should borrow that much. Second, after you get pre-approved, do not take on any new debt or big purchases (like a car or furniture) until closing. Even a single large loan can change your credit or debt ratios, risking a lower approval or higher rate when finalizing. And third, keep your documentation updated – lenders may re-check your income or bank accounts before closing.

Mortgage financing options: In Vancouver you have many financing paths. Major banks (RBC, TD, CIBC, Scotia, etc.) offer standard mortgages, and their posted rates are easy to find online or in-branch. BC credit unions (like Vancity or Coast Capital) also provide mortgages with competitive rates and flexible service. Mortgage brokers can search dozens of lenders (banks and non-banks) on your behalf. The key is to compare Vancouver mortgage rates across these options. A good broker will negotiate with multiple lenders to find the lowest rate or best terms for you.

First-Time Homebuyer Programs in BC

If this is your first home in BC, you have extra support. First-time homebuyer programs in BC can boost your buying power:

Home Buyers’ Plan (HBP): Allows first-time buyers to withdraw up to $60,000 (per person) from RRSPs tax-free for a down payment.
BC Property Transfer Tax Exemption: If your purchase price is $835,000 or less, you may qualify to pay no property transfer tax on the first $500,000 of the price. There are partial exemptions up to about $860,000.
BC Home Owner Grant: After buying, the Home Owner Grant gives up to ~$770 off your annual property taxes (more for seniors/veterans). It’s not a mortgage help per se, but it lowers ongoing costs for owners of homes up to $2.15M.
First-Time Home Buyers’ Tax Credit (HBTC): A non-refundable income tax credit of $10,000 when you file taxes (saving up to $1,500) to offset some closing costs.
New 30-Year Mortgage: Since late 2024 first-timers (especially on new builds) can get a 30-year amortization on insured mortgages. That lowers monthly payments by spreading principal over 30 instead of 25 years (though you pay more interest over time). To qualify, one borrower must be a first-timer and the loan is ≤80% of purchase price (i.e. ≥20% down).
First Home Savings Account (FHSA): A new federal savings account for first-time buyers. You can contribute up to $8,000/year (to $40,000 total), and gains are tax-free (similar to a TFSA).
GST New Housing Rebate: If you buy a new home, you can get a rebate of some of the federal GST (up to $50,000 on homes ≤$1M). Check eligibility rules if you buy a new condo or house.

These programs are meant to help offset Vancouver’s steep costs. To use them effectively, plan early: for example, set up an FHSA or contribute to RRSPs in time for the HBP. Talk to your mortgage broker or financial advisor about combining these programs with your mortgage strategy.

How to Choose a Mortgage in Vancouver

Choosing the right mortgage means weighing several factors. Start by comparing interest rates and types. Use online rate-comparison tools or a broker to see current Vancouver mortgage rates for fixed and variable terms. Check both big banks and smaller lenders. For example, recently credit unions and broker companies like Prospera, Butler Mortgage and First National have offered some of the lowest fixed and variable rates. Don’t assume only the big bank has the best rate – often a broker can secure a better deal at a credit union or mortgage company.

Next, decide on term length and amortization. The most common term is 5 years, but you might choose 1- or 2-year if you think rates will fall soon. Amortization (the total years to repay) is usually up to 25, but first-time buyers (with high ratio loans) can go to 30 years now. A longer amortization lowers monthly payments but means more interest overall. Think about how long you plan to stay in the home: if only a few years, a variable rate or shorter term might be fine, but if you want stability, locking in a 5-year fixed could be safer.

Credit score and loan amount also matter. Lenders typically favor borrowers with good credit, stable income and a solid down payment. If you have a strong profile, shop for the lowest Vancouver mortgage rates. If your credit is fair or you’re self-employed, you may need to consider alternative lenders or mortgage brokers who specialize in non-traditional financing. In such cases, expect higher rates.

Finally, check lender fees and features. Different lenders charge different mortgage arrangement fees or allow different prepayment privileges. For example, some mortgages let you pay extra into principal (double-up payments) or allow a lump-sum payment without penalty. Consider these if you plan to pay off the mortgage faster. Consult with your mortgage broker or lender to understand all terms before deciding.

Mortgage Tips for Vancouver Buyers

Get pre-approved early: Before house hunting, secure a mortgage pre-approval. This locks in a rate (for ~90–120 days) and confirms your budget. It also shows sellers you’re serious, which helps in competitive offers.
Save for more down payment: The more you can put down (aim for 20%+), the lower your interest costs and the less you’ll pay for mortgage insurance. Even going from 5% to 10% down can save on insurance premiums.
Shop lenders, compare rates: Don’t just ask your bank. Use a mortgage broker or comparison site. For a $1,000,000 mortgage, a 0.2% lower rate saves ~$2,000 per year. Lock in the best Vancouver mortgage rate you can find.
Consider fixed vs. variable: Weigh stability vs. potential savings. If you fear rate hikes, fix your rate now. If you think rates will drop, a variable could pay off. Remember current data: 5-year fixed and variable rates are very close right now.
Use first-time incentives: If eligible, take advantage of programs like the RRSP Home Buyers’ Plan, FHSA, GST rebate, and the BC tax exemptions. These can boost your down payment or cut costs.
Keep debt stable: After pre-approval, avoid new loans (like car financing) or big credit purchases. New debt can reduce your approved mortgage amount or raise your rate.
Budget for all costs: Beyond the mortgage, account for closing costs (legal fees, transfer tax, land transfer tax on higher-priced homes, and CMHC insurance if applicable) and ongoing costs (insurance, property tax). Don’t pick a purchase price that strains your monthly budget.
Work with professionals: A good real estate agent and mortgage broker who know Vancouver can save you headaches. They can recommend lenders, explain rate locks, and ensure you meet stress-test rules (you must qualify at your rate +2%).

Conclusion

By following these tips, you’ll be well-prepared to choose the right mortgage for your Vancouver home. Remember that rates and rules can change, so stay updated and ask questions. With a clear plan, you can confidently secure a mortgage that fits your needs and makes home ownership in Vancouver a reality.

Need expert guidance? Contact Adam Chahl and his team for personalized support, smart mortgage strategies, and local insight into the Vancouver housing market.

Frequently Asked Questions

1. What are current Vancouver mortgage rates in 2025?
Rates vary, but average 5-year fixed and variable rates are around 3.69% to 3.70%, depending on the lender and borrower profile.

2. How much down payment do I need in Vancouver?
For homes under $500,000, at least 5%. For homes over $1 million, you'll need 20% down. Average condo buyers often put down 5–10%, while detached buyers often aim for 20%.

3. Should I get a fixed or variable mortgage?
Fixed gives stability, variable offers potential savings. Choose based on your risk tolerance, income stability, and expectations for interest rate trends.

4. How do I get mortgage pre-approval in Vancouver?
Provide income, asset, and debt documentation to a lender or mortgage broker. Pre-approval usually takes 1–2 business days if you're organized.

5. Are there programs to help first-time buyers in BC?
Yes – programs include the Home Buyers' Plan, FHSA, property transfer tax exemptions, GST rebates, and more. These can reduce upfront costs significantly.