Prince Edward Island’s housing market has seen significant price growth in recent years, with the average home price reaching approximately $360,000 in early 2025. Despite the increases, PEI remains well below the national average and offers a more affordable entry point than Ontario or BC. Current mortgage rates are shown below.
| Name | 2-Year Fixed | 3-Year Fixed | 4-Year Fixed | 5-Year Fixed | 5-Year Variable |
|---|---|---|---|---|---|
| BMO | 7.34 | 6.95 | 6.74 | 6.79 | 6.7 |
| CIBC | 6.99 | 6.99 | 6.74 | 6.84 | 6.7 |
| Nesto | 5.84 | 4.79 | 4.89 | 4.34 | 5.4 |
| Pine | 6.24 | 4.24 | 4.54 | 4.34 | 4.75 |
| RBC | 5.89 | 5.09 | 4.99 | 4.94 | 6.1 |
| Scotiabank | 7.19 | 6.74 | 6.54 | 6.59 | 7.15 |
| TD | 7.34 | 5.22 | 6.74 | 5.12 | 6.19 |
| True North | 4.99 | 4.84 | 4.84 | 4.49 | 5.5 |
This table was last updated on December 21, 2024 rates are from the data available on each institution’s website.
Fixed vs. variable mortgage rates in PEI
| Feature | Fixed Rate | Variable Rate |
|---|---|---|
| Rate type | Locked for the term | Fluctuates with prime rate |
| Typical 5-year rate | 4.0% - 5.0% | 4.5% - 5.5% |
| Payment certainty | High | Lower |
| Penalty to break | Higher (IRD) | Lower (3 months interest) |
| Best when | Rates expected to rise | Rates expected to fall |
The Bank of Canada reduced the overnight rate from 5.00% to 2.75% through a series of cuts in 2024-2025, making variable rates increasingly competitive. However, fixed rates remain popular for their payment certainty.
Monthly payment examples for PEI home prices
Based on a 25-year amortization with minimum down payment:
| Home Price | Down Payment | Rate | Monthly Payment |
|---|---|---|---|
| $250,000 | $12,500 (5%) | 4.0% | ~$1,248 |
| $300,000 | $15,000 (5%) | 4.5% | ~$1,580 |
| $360,000 | $18,000 (5%) | 4.5% | ~$1,896 |
| $400,000 | $20,000 (5%) | 5.0% | ~$2,219 |
| $500,000 | $25,000 (5%) | 5.0% | ~$2,775 |
Use the PEI mortgage payment calculator for exact figures at your rate and amortization.
PEI land transfer tax
PEI charges a land transfer tax on all property purchases using marginal rates from 0.5% to 2.5%:
| Home Price | Land Transfer Tax |
|---|---|
| $250,000 | $2,225 |
| $360,000 | ~$3,925 |
| $500,000 | $6,475 |
First-time homebuyers can receive a rebate of up to $4,000, which fully covers LTT on homes up to approximately $368,000.
PEI housing market overview
PEI has experienced significant home price appreciation, with prices roughly doubling between 2019 and 2024. Key factors include:
- Population growth — immigration and interprovincial migration have driven demand
- Limited supply — PEI’s small housing stock has not kept pace with demand
- Charlottetown — the provincial capital has the highest prices in the province
- Summerside and rural areas — more affordable options still exist
Despite the increases, PEI remains more affordable than most of Canada. The PEI mortgage affordability calculator can show what you can afford.
Down payment requirements in PEI
| Purchase Price | Minimum Down Payment |
|---|---|
| Under $500,000 | 5% of purchase price |
| $500,000 to $999,999 | 5% of first $500K + 10% of remainder |
| $1 million+ | 20% of purchase price |
If your down payment is less than 20%, you will need mortgage default insurance. Use the down payment calculator for exact amounts.
Tips for getting the best PEI mortgage rate
- Compare multiple lenders — rates vary between big banks, credit unions, and mortgage brokers
- Consider insured vs. uninsured — insured mortgages (less than 20% down) often get lower rates
- Improve your credit score — scores above 680 typically qualify for the best rates
- Shorten your amortization — 25-year amortizations may qualify for slightly better rates than 30-year
Frequently asked questions
What are the best mortgage rates in PEI right now?
The best 5-year fixed rates in PEI range from approximately 3.9% to 5.0% depending on the lender and mortgage type.
Is PEI affordable for homebuyers?
PEI is moderately affordable at ~$360,000 average, below the national average but higher than it was a few years ago.
Should I choose fixed or variable in PEI?
Fixed rates offer certainty; variable rates may save money if rates continue to fall. Your choice depends on your risk tolerance and outlook on interest rates.
Related guides
- PEI land transfer tax calculator
- PEI mortgage affordability calculator
- PEI mortgage payment calculator
- Down payment calculator
- Mortgage insurance calculator
- Mortgage rates across Canada
