A two-year or a five-year fixed?
On October 7, 2026 a renewal post from southern Ontario listed a Scotiabank menu. The two-year fixed was 4.11%. The five-year fixed was 4.46%. The three-year, which is the term most of the thread was arguing about, was 4.27%. The five-year variable on the same menu was 3.62%, written as prime minus 0.83.
| Term on that menu | Rate | What you lock |
|---|---|---|
| 2-year fixed | 4.11% | A lower rate, and another renewal in 2028 |
| 3-year fixed | 4.27% | The middle. You skip one decision |
| 5-year fixed | 4.46% | You do not reprice until 2031 |
| 5-year variable | 3.62% | You reprice whenever prime moves, for five years |
On $500,000 over 25 years, 4.11% and 4.46% are not a rounding error. The payment at 4.46% is higher by roughly the same method as the other gaps on this site: about $100 a month. You pay that extra amount for three more years of not having to negotiate. If rates are lower in 2028, the two-year was the better trade and you shop again. If rates are higher, the five-year was the ceiling you wanted. The October 28 hike is one data point in that argument, not the whole path to 2031. The Bank's next look is December 9, 2026.
Shorter fixed terms also come back to the penalty math sooner, which matters if you might sell. A five-year fixed broken in year two can cost an interest-rate differential that a two-year, already near its end, will not. People who know they are moving pick the term that lines up with the move, even when the longer rate looks calmer.
This menu is one file at one bank. Your two-year might not be cheaper than your five-year. Have both printed, plus a variable, after prime is updated. That is the list to hand over when you request cheaper rates.