Fall 2026 Mortgage Market Update

What’s Happening With Rates — And What Should Homeowners Be Watching?

As we head into the final few months of 2026, one of the questions I’m hearing most often is:

“What do you think mortgage rates are going to do next?”

The Bank of Canada has kept its overnight rate at 2.25% throughout 2026, and while many borrowers had hoped we would see additional rate cuts this year, the outlook has become less certain.

Inflation, employment, economic growth and ongoing global uncertainty will all play a role in what happens next.

Will Rates Come Down Before the End of the Year?

There are only two Bank of Canada rate announcements remaining in 2026 — October 28 and December 9.

At this point, I would be cautious about waiting for a significant drop in rates before making a mortgage decision.

While we could still see movement, there is no guarantee rates will be lower later this year. In fact, fixed mortgage rates can move in either direction regardless of what the Bank of Canada does because they are influenced primarily by the bond market.

The good news? You don’t necessarily have to choose between locking in now and waiting for something better.

For many purchases and renewals, we can secure a competitive rate ahead of time to protect you from an increase. If rates improve before closing, there may still be an opportunity to obtain the lower rate.

That can take some of the guesswork out of trying to time the market.

Fixed vs. Variable: What Are Borrowers Choosing?

There is no universal answer right now — and that’s actually a good thing.

Fixed rates continue to be attractive for borrowers who want predictable payments and protection from potential increases.

Variable rates may appeal to borrowers who are comfortable with some uncertainty and want the opportunity to benefit if the Bank of Canada eventually begins cutting rates again.

I’m also continuing to see interest in 3-year fixed terms. For some borrowers, a shorter term provides a nice middle ground: payment stability today without committing to a rate for a full five years.

The right strategy depends on much more than today’s rate. Your future plans, cash flow, risk tolerance and likelihood of selling or refinancing should all be part of the decision.

Don’t Look at the Rate Alone

One of the biggest mistakes borrowers can make is choosing a mortgage based solely on the lowest advertised rate.

A great mortgage is about more than the rate.

Depending on the lender and product, there can be significant differences in:

Prepayment privileges — How much extra can you pay toward your mortgage each year?

Penalties — What happens if you need to break the mortgage early?

Home Equity Lines of Credit — Can you easily access your equity in the future?

Portability — Can you take your mortgage with you if you move?

Cash-back incentives — Some lenders are offering incentives that can help offset switching or closing costs.

Flexibility — Your plans today may look very different three years from now.

Sometimes paying a few dollars more per month for a more flexible mortgage can save thousands of dollars later.

A Mortgage Tip Heading Into 2027

Consider Setting Up Access to Your Home Equity While You’re Still Working

This is a conversation I’m having more frequently with clients who are approaching retirement.

You may have no intention of borrowing against your home today — but having a Home Equity Line of Credit (HELOC) available can provide additional financial flexibility in the future.

Qualifying for new borrowing can sometimes be more difficult after retirement when employment income changes.

For the right homeowner, arranging access to equity while income is strong and qualification is easier can be worth considering — even if the credit line simply sits there unused.

It isn’t the right strategy for everyone, but it’s something worth discussing as part of your longer-term mortgage and retirement planning.

Renewing in the Next 4–6 Months?

Don’t wait for your lender’s renewal letter.

If your mortgage is coming due in late 2026 or early 2027, now is a good time to start reviewing your options.

Starting early gives us time to:

✓ Compare your existing lender’s offer against the market
✓ Secure a rate in case rates increase
✓ Watch for improvements before your renewal date
✓ Review fixed versus variable options
✓ Consider whether your amortization still makes sense
✓ Look at consolidating higher-interest debt
✓ Discuss adding a HELOC or accessing equity
✓ Make sure your mortgage still fits where you’re headed next

Your existing lender knows it’s convenient for you to simply sign the renewal offer.

That doesn’t necessarily mean they’re offering you their best option.

Thinking About Buying, Refinancing or Renewing?

You don’t have to wait until you’re ready to make a move to reach out.

Sometimes a quick mortgage review can identify an opportunity. Other times, it simply confirms that you’re already in a great position.

Either way, you’ll know.