A home in Toronto's west end in June, 2025.Cole Burston/The Globe and Mail
Mortgage analysts have been warning of rate hikes for fixed mortgages ever since the U.S. and Israeli conflict with Iran started. Those hikes took some time to materialize, but as of this week, advertised three- and five-year fixed rates are now firmly above 4 per cent on Ratehub.ca.
For months, rates had been sitting at the mid-3-per-cent level thanks to relatively stable interest-rate expectations from the Bank of Canada.
The main cause of these higher rates are rises in the five-year Canada bond yield, which lenders use to determine their fixed mortgage spreads. The five-year yield has been above the 3-per-cent mark for two weeks and it peaked at 3.3 per cent last week – its highest point since late 2024 – as investors worry about the long-term effects of conflict in the Middle East.
Oil prices are soaring, and so are fixed mortgage rates. Should you go variable?
Fixed rates are now notably higher than variable-mortgage rates, and the lowest advertised variable rate on Ratehub.ca was 3.35 per cent on Thursday.
But the war is cause for concern for variable rate mortgage holders, too. Markets and economists are now expecting two rate increases from the Bank of Canada by the end of 2026. A third hike beyond the expected increases would make variable rates more expensive than current fixed 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?
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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 market close on Thursday.
