After trending down earlier this year, fixed rates have started moving back up. This isn’t coming from the Bank of Canada, it’s being driven by the bond market. Over the past few weeks, lenders have made several upward adjustments as bond yields have risen. 

This has been driven by a few key factors, including oil prices pushing back toward the $90–$100 range, stronger-than-expected economic data, and continued government spending. Recent data has come in ahead of expectations, reinforcing that the economy is holding up better than anticipated. Markets are also reacting quickly to ongoing global uncertainty, which is pushing bond yields higher as investors demand more stability. 

Inflation is also coming back into focus, with forecasts pointing to around 2.8% in Canada and closer to 3.4% in the U.S., levels we haven’t seen in close to two years. Oil remains a key driver, and prices are expected to stay elevated through the summer. 

In Canada, the economy has been holding up better than expected, with stronger GDP data and solid activity in areas like construction and infrastructure. While some sectors are softer, it hasn’t been enough to push the Bank of Canada toward rate cuts anytime soon. 

Expectations for variable rates have become more mixed. Some economists are forecasting potential increases to the Bank of Canada’s policy rate, in some cases up to 0.50%, while others expect rates to hold through 2026. This makes the fixed vs variable decision less straightforward than in the past, and highlights how quickly the outlook can shift. 

Fixed rates have risen while variable rates have held steady, widening the gap between the two. One reason is that locking into a fixed rate right now comes at a higher cost, as lenders are pricing in uncertainty over the next few years.

With how quickly things are changing, it may be a good time to review your current mortgage, even if your renewal isn’t coming up right away. It’s not always just about the lowest rate, flexibility and cash flow can be just as important, depending on your comfort level and plans over the next few years. 

• If you’re within 6–12 months of renewal, planning ahead and exploring rate options early can help
• If you’re in a variable rate, it may be worth revisiting whether it still aligns with your plans
• If you’ve built up equity, there may be opportunities to refinance, consolidate debt, or set up a line of credit for added flexibility

If you’re unsure where things stand, feel free to reach out and we can book a time to review your mortgage. You’re also welcome to reply back, even if it’s just a quick question. Sometimes a small adjustment now can make a bigger difference over the next few years.