The 4 forces that move Canadian mortgage rates
Bank of Canada policy rate
Sets the overnight rate → bank prime → all variable mortgages + HELOCs. Driven mainly by inflation vs. the 2% target and the labour market.
5-year Government of Canada bond yield
The anchor for 5-year fixed mortgage rates. Lenders price fixed mortgages as the bond yield + a spread. Bonds move daily on economic data + global markets.
Inflation (CPI)
Hot inflation pushes the Bank to hold/hike; cooling inflation opens the door to cuts. The single biggest swing factor for the policy path.
US Federal Reserve + global markets
Canadian bond yields don't move in isolation — US Treasury yields and Fed policy spill over into our fixed rates.
Mortgage rate forecast — FAQ
Will mortgage rates go down in Canada?
Nobody can promise a path — rates follow inflation and the Bank of Canada, which surprise both ways. What we can do is structure your mortgage so you win across scenarios: the right term length, fixed vs variable for your risk tolerance, and a rate hold so a rise can't catch you.
What drives fixed vs variable mortgage rates?
Fixed rates track the 5-year Government of Canada bond yield; variable rates track the Bank of Canada's overnight rate (via bank prime). They can move in opposite directions, which is why the fixed-vs-variable decision matters.
Should I lock a fixed rate or go variable now?
It depends on your risk tolerance and outlook. Fixed = payment certainty; variable = typically a lower starting rate + cheaper to break, but payment risk. We model both against your file and the current spread — book a 15-minute review.
How do I protect against rates rising before I buy?
A pre-approval comes with a 90-120 day rate hold — your rate can't rise during it, and many lenders honour a drop. Start a pre-approval (no bureau pull to begin) and you're protected while you shop.
Where can I see current Canadian rate data?
Our Canadian Lending Snapshot pulls the Bank of Canada policy rate, prime, and the 5-year GoC bond yield live, and the rate board shows today's best across 50+ lenders.