About 4-Year Fixed Mortgages
The 4-year fixed is one of the less-promoted but quietly popular Canadian terms. It typically prices a few basis points above the 4-year Government of Canada bond yield and slightly below the 5-year fixed in most rate environments.
It's a useful term when the yield curve is flat — meaning the 4-year and 5-year are within ~0.05% of each other — and you'd rather give up one year of lock-in to renew sooner. It's also worth considering if you expect to refinance for renovations or a property change in roughly four years.
Like all fixed terms, breaking early triggers an IRD penalty. The 4-year IRD tends to be smaller than the 5-year because there's less remaining time, but it's still substantial in the first 12–18 months of the term.
Pros
- Slightly lower rate than 5-year in most markets
- Renews 12 months earlier — useful if you expect rate cuts
- Same payment stability as the 5-year for nearly as long
Cons
- Less popular term — fewer lender promotions
- Still subject to IRD penalty if broken early
Who it suits: Borrowers who want fixed-rate certainty but expect to renegotiate or move slightly sooner than 5 years.