By the end of 2026, more than a third of Canadian homeowners will renew their mortgages, many of them facing higher rates. (Credit: Azin Ghaffari\/Postmedia News)
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Mortgage borrowers<\/a> who have been holding out for lower interest rates<\/a> are now finding they have run out of time, say industry professionals.<\/p>\n Fixed-rate mortgages, which are influenced by market conditions and government bond yields, have been drifting higher, rising from a range of mid-3 per cent this fall to low 4 per cent now.<\/p>\n \u201cOver the past few months, I\u2019ve seen clients turn down fixed-rate renewal offers around 3.7 per cent because they were convinced rates would keep falling,\u201d said Leah Zlatkin, a mortgage broker and LowestRates.ca<\/a> expert.<\/p>\n \u201cNow those same borrowers are coming back and finding that the best available rates start with a four. That delay is already resulting in higher monthly payments.\u201d<\/p>\n By the end of 2026, more than a third of Canadian homeowners will renew their mortgages, many of them at higher rates from the lows of the pandemic.<\/p>\n Over the past year, variable rates have dropped more than fixed, from 7 per cent in June 2024 to slightly below 4 per cent as the Bank of Canada<\/a> cut its benchmark rate.<\/p>\n However, further relief on this front now looks unlikely with the central bank expected to keep rates steady this year or, as some believe, raise them by year end.<\/p>\n Meanwhile, fixed rates have fallen just slightly more than 100 basis points, with five-year terms less than that.<\/p>\n Bond yields have been pushed higher recently by the central bank\u2019s decision to keep rates on hold and economic data beating expectations. They can also be influenced by inflation, public deficits and international financial conditions.<\/p>\n Because fixed rates are dictated by market conditions delays could lead to higher rather than lower rates, said Zlatkin. And even a small increase in a rate can add up to higher monthly payments, especially for homeowners with larger mortgages.<\/p>\n One surprising trend in Canada has been the decline in popularity of the five-year term, a traditional preference, said Hendrix Vachon, Desjardins Group principal economist, in a recent report.<\/p>\n Before the pandemic, about 30 per cent of new financing was on a five-year or more term, but between 2022 and 2025 that share dropped to 15 per cent, according to data from the Bank of Canada.<\/p>\n The most popular mortgages now are fixed rate with terms between three and five years, accounting for nearly 40 per cent of mortgages, he said.<\/p>\n Zlatkin said choosing a shorter term can help borrowers secure today\u2019s rates while leaving room to adjust if conditions change.<\/p>\n Homebuyers should also take heed. In the current buyer\u2019s market, negotiating a better price can help offset mortgage rates, but timing still matters.<\/p>\n \u201cHomeowners who value predictable payments shouldn\u2019t be waiting for a perfect moment,\u201d she said. \u201cIn this environment, waiting can mean paying more while gaining very little in return.\u201d<\/p>\n \u00a0Sign up here<\/a> to get Posthaste delivered straight to your inbox.<\/strong><\/p>\n Today\u2019s chart from Royal Bank of Canada<\/a> gives us a picture of just how bad Toronto\u2019s condo market has become. Pre-construction sales in 2025 were down 90 per cent from the average over the nine years before 2024, said RBC.<\/p>\n \u201cThe Greater Toronto Area\u2019s new condominium development sector has entered a deep freeze with pre-construction sales plummeting to levels not seen since the global financial crisis,\u201d wrote Robert Hogue, RBC assistant chief economist, in a report in September.<\/p>\n This spells trouble for housing construction, said the bank. It expects housing starts to fall more than 10 per cent nationally in 2026 and even more in 2027, despite government efforts to bolster the country\u2019s housing supply.<\/p>\n Should Margaret, 62, buy a condo or beef up her investments with her $275,000 inheritance? Find out why FP Answers thinks in this case renting may not be a bad choice. Read more<\/a><\/p>\n Interested in energy? The subscriber-only FP West: Energy Insider newsletter brings you exclusive reporting and in-depth analysis on\u00a0 one of the country\u2019s most important sectors. Sign up here.<\/a><\/p>\n Are you worried about having enough for retirement? Do you need to adjust your portfolio? Are you starting out or making a change and wondering how to build wealth? Are you trying to make ends meet? Drop us a line at\u00a0wealth@postmedia.com<\/a>\u00a0with your contact info and the gist of your problem and we\u2019ll find some experts to help you out while writing a Family Finance story about it (we\u2019ll keep your name out of it, of course).<\/p>\n Want to learn more about mortgages? Mortgage strategist Robert McLister\u2019s Financial Post column <\/a>can help navigate the complex sector, from the latest trends to financing opportunities you won\u2019t want to miss. Plus check his mortgage rate page<\/a> for Canada\u2019s lowest national mortgage rates, updated daily.<\/p>\n Visit the Financial Post\u2019s YouTube channel<\/a> for interviews with Canada\u2019s leading experts in business, economics, housing, the energy sector and more.<\/p>\n Today\u2019s Posthaste was written by Pamela Heaven<\/a> with additional reporting from Financial Post staff, The Canadian Press and Bloomberg.<\/p>\n Have a story idea, pitch, embargoed report, or a suggestion for this newsletter? Email us at\u00a0posthaste@postmedia.com<\/a>.<\/p>\n Bookmark our website and support our journalism:<\/strong> Don\u2019t miss the business news you need to know \u2014 add\u00a0financialpost.com<\/a>\u00a0to your bookmarks and sign up for our newsletters here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"By the end of 2026, more than a third of Canadian homeowners will renew their mortgages, many of…\n","protected":false},"author":3,"featured_media":497126,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[2440,64,223503,79,223501,223498,267,223499,223500,223504,14606,42191,67,132,68,223502],"class_list":{"0":"post-497125","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-bank-of-canada","9":"tag-business","10":"tag-canadian-homeowners","11":"tag-economy","12":"tag-fixed-rates","13":"tag-fixed-rate-mortgages","14":"tag-interest-rates","15":"tag-leah-zlatkin","16":"tag-mortgage-borrowers","17":"tag-mortgage-broker","18":"tag-mortgage-rates","19":"tag-royal-bank-of-canada","20":"tag-united-states","21":"tag-unitedstates","22":"tag-us","23":"tag-variable-rates"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/115849695383510052","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/497125","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=497125"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/497125\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/497126"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=497125"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=497125"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=497125"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}<\/a>
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