Posted vs special mortgage rates, and why the gap sets your penalty
A posted rate is a lender's list price; a special rate is what it actually advertises. The big banks' typical posted 5-year rate was 6.19% in the week of Oct 28, 2026, while the lowest 20%+ down 5-year special we collected was 4.59%. Posted rates matter most when you break a fixed mortgage early.
What is the difference between a posted rate and a special rate?
Banks publish a posted rate for each term. Almost nobody pays it: borrowers are offered a discount, either an advertised special (shown on the bank's site, often with conditions such as an amortization of 25 years or less) or one negotiated on their file. Some lenders, including several credit unions and mortgage lenders that sell through brokers, publish only one set of rates; others, such as Scotiabank, publish posted rates and keep discounts for conversations with an advisor. The Bank of Canada still tracks the big banks' typical posted rates every week.
How far apart are posted and special rates at the big banks?
| Bank | Posted 5-yr | Gap to 4.59% |
|---|---|---|
| RBC Royal Bank | 6.19% | 1.60 pts |
| TD | 6.14% | 1.55 pts |
| Scotiabank | 6.19% | 1.60 pts |
| National Bank | 6.14% | 1.55 pts |
On average the banks' posted 5-year rates sit 1.58 points above the lowest 5-year special we collected. That gap is the reason posted rates still matter.
How do posted rates inflate the penalty for breaking a mortgage?
On a closed fixed mortgage the penalty is usually the greater of three months' interest and the interest rate differential (IRD). Most big banks compute the IRD with posted rates: the comparison rate is today's posted rate for the term closest to the time left on your mortgage, minus the discount you received when you signed (the posted rate then, minus your rate). Because the whole discount is subtracted, the comparison rate can end up well below your own rate, and the IRD is the difference times your balance times the time left.
Lenders that use a "published rate" method compare your rate with their current rate for the time left, with nothing subtracted. Which method gives the bigger penalty depends on how today's posted-to-special gap compares with the discount you got. Your mortgage contract must tell you which method applies.
What does the posted-rate method cost in practice?
| Balance | $400,000 |
|---|---|
| Your rate | 4.68%average new uninsured 5-yr+ fixed, Nov 2024 (Bank of Canada) |
| Posted 5-yr when you signed | 6.49%Bank of Canada typical big-bank posted, Nov 2024 |
| Posted 3-yr today (time left ≈ 3 years) | 6.05%week of Oct 28, 2026 |
| Discount you received | 1.81 ptsposted then − your rate |
| Comparison rate | 4.24%posted 3-yr today − your discount |
| IRD | $5,280balance × rate gap × 36 ÷ 12 |
| Three months' interest | $4,680 |
| Penalty (the greater) | $5,280 |
Rates have risen since late 2024, which keeps this IRD modest. Had posted rates fallen instead, the same discount would be subtracted from a lower posted rate and the IRD would grow quickly. For a full penalty estimate by lender, use BankMortgages.ca's mortgage penalty calculator.
Open this example in the posted-rate penalty check →Computed Nov 2, 2026.
How can you protect yourself from a large penalty?
- If you might sell, move or refinance within the term, weigh a variable rate (usually three months' interest to break) or a shorter term.
- Ask before you sign whether the lender uses posted or published rates for its IRD, and get the method in writing.
- Use your annual prepayment privileges; TD, for example, allows up to 15% of the principal a year on closed mortgages without a charge.
- Ask about porting the mortgage to your next home, or a blend-and-extend, before paying to break it.
What this means for you
- Choosing a lender: two lenders with the same special rate can cost very different amounts to leave. Read the penalty clause, not just the rate.
- Already have a bank mortgage: find the posted rate on your commitment letter; it's the number that drives your IRD.
- Thinking of breaking: ask for a written payout statement and compare it with the interest you'd save over the time left.
Frequently asked questions
Does anyone pay the posted rate?
Rarely. Posted rates are list prices; lenders advertise and negotiate lower rates. The posted rate still matters if your lender uses it in the penalty formula.
Why do banks keep posted rates?
They're the reference in many contracts and penalty formulas. The Bank of Canada also publishes the typical big-bank posted rate each week.
Which lenders use the posted-rate method?
Most big banks do; many lenders that sell through brokers use their current published rate instead. Your contract's information box says which applies.
Primary sources
- Bank of Canada — Posted conventional mortgage rate, 5-year (series V80691335) (effective October 28, 2026). Checked .
- Bank of Canada — Posted conventional mortgage rate, 3-year (series V80691334) (effective October 28, 2026). Checked .
- Financial Consumer Agency of Canada — Reduce prepayment penalties. Checked .
- Financial Consumer Agency of Canada — Breaking your mortgage contract. Checked .
- Justice Laws — Interest Act (R.S.C. 1985, c. I-15), ss. 6 and 10. Checked .