If you have been following the news lately, you have probably noticed a lot of conflicting headlines around mortgage rates. Some articles are talking about future rate cuts, while others are warning about inflation and rising bond yields. At the same time, some lenders have quietly started increasing fixed mortgage rates again.

So what is actually happening?

The first thing to understand is that fixed and variable mortgage rates do not move for the same reasons.

Variable-rate mortgages are tied more directly to the Bank of Canada’s overnight rate. If the Bank of Canada raises or lowers its policy rate, lenders typically adjust their prime rates shortly after.

Fixed rates work differently. They are influenced mainly by Government of Canada bond yields. Bond yields move daily based on inflation expectations, employment data, and global uncertainty. That means fixed rates can rise even when the Bank of Canada has not changed its rate.

Recently, Canada saw weaker employment numbers, including a loss of full-time jobs and higher unemployment. Interestingly, weaker economic data can sometimes help fixed rates by pushing bond yields lower.

At the same time, inflation concerns have not fully disappeared. Oil prices, tariffs, global conflict, and supply chain pressures are still creating uncertainty. Some economists and large financial institutions have even started discussing the possibility of “stagflation,” where slower economic growth and persistent inflation happen at the same time.

This uncertainty is one reason some lenders have quietly increased fixed mortgage pricing in recent weeks. Fixed mortgage pricing is based not only on where bond yields are today, but also on where lenders believe risk and funding costs may head next.

Canada is also closely tied to the U.S. economy, and markets are watching the U.S. Federal Reserve carefully. Right now, expectations are shifting toward rates staying higher for longer than many originally anticipated.

So what does this mean for homeowners and buyers this summer?

The mortgage market will likely remain volatile. Fixed rates may continue moving up or down based on bond market activity, even if the Bank of Canada holds steady. Variable-rate borrowers may see more short-term stability, while fixed-rate pricing continues to fluctuate.

For homeowners renewing in 2026, now is a good time to start planning ahead. Many lenders allow rate holds within 120 days of maturity, and reviewing options early provides more flexibility if markets shift.

Most importantly, rate alone should not be the only factor in the decision. Flexibility, penalties, future plans, cash flow, and access to equity all matter when choosing the right mortgage strategy.

As always, if you have questions about your mortgage, renewal, or current options in the market, I’m always happy to help.