About 7-Year Fixed Mortgages
The 7-year fixed is a niche term in Canada. Most lenders offer it, but few advertise it because the 5-year dominates demand. It's priced off the 7-year Government of Canada bond yield, which historically sits 0.20–0.50% above the 5-year.
Where the 7-year shines: families who plan to stay in their home for the long haul, want maximum payment stability, and can absorb a modest premium for the extra two years of certainty. After 5 years you're also legally allowed to break the mortgage with only a 3-month interest penalty (under the Interest Act), which dramatically reduces exit risk in years 6–7.
Pros
- Longer payment certainty than the standard 5-year
- After year 5, break penalty is capped at 3 months' interest (Interest Act §10)
- Insulates against multi-year rate volatility
Cons
- Higher rate than 5-year in nearly all environments
- First 5 years still subject to full IRD penalty
- Few lender promotions — quoted on request
Who it suits: Long-term homeowners with stable income who want set-and-forget pricing for nearly a decade.