After months of optimism about lower borrowing costs, fixed mortgage rates are inching back up. It’s not what many homeowners expected, especially after the Bank of Canada signalled that it was done raising its overnight rate.
What’s driving this shift?
One thing many homeowners don’t know is that fixed mortgage rates don’t move directly with the Bank of Canada rate. Instead, they are actually tied to long-term bond yields (Canada 5- and 10-Year Bonds) that reflect investor expectations about inflation, global growth and government spending.
The Canada 5- and 10-Year Bonds are also tightly connected to the U.S. 10-Year Treasury Yield, which follows U.S. employment and inflation data. Over the fall, those yields began climbing again as markets priced in for higher for longer inflation and strong employment data. The result: lenders quietly adjusted fixed rates upward, even as variable rate borrowers stayed steady.
For Alberta homeowners, this is a reminder that rate drops aren’t guaranteed and timing your mortgage renewal or refinance matters. A small change in bond yields can shift your monthly payment by hundreds of dollars a year. If you’re due to renew in 2026, start early. Many lenders allow rate holds up to 120 days in advance, letting you secure today’s rate while watching the market, while still allowing for a rate drop before your renewal date if rates move down.
Finally, don’t just watch headlines; every borrower’s situation is different. Whether you’re refinancing to consolidate debt, make your payments more manageable, to help a move or if you’re simply budgeting ahead, personalized advice can make a meaningful difference.
Rates will always fluctuate — but, with the right strategy, your mortgage doesn’t have to.
Brie Robertson and Katie Whyte are mortgage brokers and owners of Illuminate Mortgage Group.
