2026 could be a relatively calm year in bond markets and fixed interest rates.Keito Newman/The Globe and Mail
The Bank of Canada may be holding interest rates for the foreseeable future, but last week’s bond market volatility has shaken up fixed mortgage rates as 2025 comes to a close.
The Canada five-year bond yield, which is one of the most important factors that lenders use to determine their long-term fixed mortgage rates, spiked by 20 basis points to 3 per cent by Monday last week, before settling around 2.9 per cent this week. Yields had hovered around 2.8 per cent for months beforehand.
Lenders have already ratcheted up rates as a result. Victor Tran, a mortgage broker and specialist with Rates.ca, said some major banks have raised their advertised five-year rates well into the 4 per cent level this week. Some of the lowest available rates on Ratehub.ca are now in the high 3 per cent range as of Thursday afternoon.
“The five-year bond yield likely will remain at this point for the foreseeable future, at least until the next Bank of Canada announcement,” said Mr. Tran.
He said the spike in rates was a direct result of the latest employment report, which was much stronger than expected. Statistics Canada said that the jobless rate dropped to 6.5 per cent from 6.9 per cent in October, and November marked the third consecutive month of job growth.
Barring any major changes to monetary policy or Canada’s trade relationship with the U.S., Mr. Tran said 2026 could be a relatively calm year in bond markets and fixed interest rates.
What do you want to know about mortgages?
Do you have a mortgage question for our expert? Is a variable or fixed rate the best option? Does it make financial sense to refinance? Is it better to consult your bank or go to a mortgage broker?
Submit your questions below and Ratehub's Penelope Graham could answer it in an upcoming column.
Mortgage rates are sourced by Ratehub.ca. For a comprehensive list of today’s mortgage rates for each term/type, visit ratehub.ca/best-mortgage-rates.
Ratehub.ca is a mortgage-rate comparison marketplace and mortgage brokerage. It helps millions of Canadians compare and obtain the best mortgage rates, credit cards, insurance, deposits and loan products.
Rates shown are the lowest available for each term/type and category (insured versus uninsured) as of market close on Thursday.
