Mortgage rates are sitting around high 3- to low 4-per-cent right now, depending on whether the mortgage is insured or uninsured, says Rates.ca mortgage and real estate expert Victor Tran.Richard Buchan/The Canadian Press
Mortgage rates are set to remain stable in the coming months, with geopolitical uncertainty expected to be offset by more stable inflation and economic resilience, experts say.
With the exception of Toronto-Dominion Bank, which notified brokers on Thursday that it would be increasing both three-year fixed and variable mortgage rates by 0.10 and 0.05 per cent respectively, most major lenders were holding steady, said Victor Tran, Rates.ca mortgage and real estate expert.
National Bank cut its rates by 0.05 per cent on Thursday, and even lenders leaving their rates unchanged are set to launch promotions to attract business.
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Government of Canada five-year bond yields, which heavily influence fixed mortgage rates, have been relatively flat since mid-December, hovering between roughly 2.6 per cent and 2.9 per cent, after briefly surpassing 3 per cent earlier in December.
Across the market, mortgage rates are sitting around high 3- to low 4-per-cent right now, Mr. Tran said, depending on whether the mortgage is insured or uninsured.
“There’s just really no external factors that are evident right now that are driving rates to go up or even go down,” Mr. Tran said.
Since summer 2024, the Bank of Canada has reduced its benchmark rate by nearly three percentage points. But the rate-cutting cycle has likely come to an end until 2027 barring major economic shocks, said CIBC Capital Markets’ deputy chief economist Benjamin Tal.
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The economy is stable but not overheated. The labour market is slowing, growth is subdued and the Bank of Canada overnight rate is already at the lowest end of a neutral rate, said Mr. Tal.
Borrowers who were waiting for another 25 or 50 basis points of cuts are realizing those are unlikely, he said. This will inject some demand into the market by removing psychological barriers that kept buyers on the sidelines.
That said, long-term forecasting hinges on geopolitical factors. A mandatory review of the Canada-U.S.-Mexico Agreement is in July. A free-trade interruption could drive rates down.
Meanwhile, mortgages for a growing cohort of borrowers from 2020–21 are coming up for renewal. Many of them purchased at peak prices, and falling home values, particularly in Ontario, have left some with little or no equity, said Ron Butler, the founder of Butler Mortgage.
If someone bought a million-dollar home with an $800,000 mortgage that’s now worth only slightly more than that, “no lender can approach that for renewal,” Mr. Butler said.
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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 Thursday.
