Global uncertainty is back in the spotlight—and it’s reshaping mortgage decisions.
Rising geopolitical tensions in the Middle East have pushed oil prices higher, adding fresh inflation pressure and stirring volatility in bond markets. At the same time, Canada is heading into a massive wave of mortgage renewals, with over one million borrowers set to renegotiate in 2026.
If your mortgage is coming up this year, this isn’t just a routine renewal—it’s a key moment to reassess your strategy. And once again, the big question is: fixed or variable?
A shifting rate landscape
Recently, fixed rates have been climbing due to bond market volatility, while variable rates have remained lower. That gap has made variable options more appealing—especially for borrowers focused on reducing monthly payments.
Variable rates have dropped alongside the Bank of Canada’s rate cuts, falling from a peak of 5.0% in 2024 to around 2.25% today. As a result, some variable rates are now up to half a percentage point lower than comparable fixed rates.
That can mean real, immediate savings.
But lower doesn’t always mean better long-term.
The trade-off: savings vs. certainty
Variable rates come with flexibility—but also uncertainty. They can rise or fall over time, depending on inflation, economic conditions, and global events.
Fixed rates, on the other hand, offer stability. You lock in your payment and eliminate surprises—but often at a higher starting rate and with stricter penalties if you need to break the mortgage early.
Quick breakdown
Fixed Rate
- Predictable payments, no surprises
- Protection if rates rise
- Higher penalties for early exit
- Best for stability and peace of mind
Variable Rate
- Lower starting rate (right now)
- More flexibility, typically lower penalties
- Potential to save if rates drop further
- Comes with payment uncertainty
So… which is better?
Right now, there’s no clear winner.
Fixed rates are reacting to global market swings. Variable rates depend on future decisions by the Bank of Canada. Both paths carry uncertainty—it just shows up in different ways.
The real question isn’t “which rate is cheaper today?”
It’s “which risk are you more comfortable with?”
- Would rising payments create stress?
- Do you need flexibility to sell, refinance, or access equity?
- Is predictable budgeting a priority?
Make your renewal count
Your mortgage renewal isn’t just a formality—it’s a financial reset.
Take the time to review your full picture: debts, goals, cash flow, and future plans. Then choose the option that aligns with how you want to manage risk—not just where rates happen to be today.
If your mortgage is coming up, now’s the time to explore both options and understand what they really mean for you.
Need help deciding? Let’s walk through your options and find the right fit for your situation.