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With United States President Donald Trump’s tariff policy still fogging up Canada’s economic outlook, mortgage rates remain in a two-year downtrend.
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And yet, despite the Bank of Canada’s “preferred” inflation gauge sitting at a still-naughty 3.15 per cent, “upward (inflation) momentum has dissipated,” insisted Bank of Canada Governor Tiff Macklem on Thursday. If he’s right — and that’s extremely TBD — it implies less upside rate risk in 2026.
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That said, core inflation’s stubborn refusal to hit the two-per-cent target is a glaring reason why Macklem is hinting that rate cuts may be done for a while.
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As for the bond market, it concurs. Forward rates, as tracked by CanDeal DNA, show the market implying a 15 per cent chance of another Bank of Canada rate cut on December 10. The odds in 2026 are basically a coin flip.
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This week’s rate movers
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Among leading lenders who advertise in at least nine out of ten provinces, here is this week’s rate action:
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- One-year fixed (insured): rose four basis points to 4.69 per cent
- Three-year fixed (insured): fell five basis points to 3.84 per cent
- Five-year fixed (insured): rose five basis points to 3.79 per cent
- Ten-year fixed (insured): rose nine basis points to 5.06 per cent
- Variable (uninsured): fell 20 basis points to 3.69 per cent
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The path for rates now largely rests on how much harder (or lighter) Trump hits Canada with tariffs.
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We’ll have a better idea of that within a few months, pending a U.S. Supreme Court tariff ruling and a January notice provision in the Canada–United States–Mexico trade pact. The latter requires the U.S. to indicate its intentions on renewing the crucial agreement next July.
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Meanwhile, the economic suspense never ends. So if playing the rate guessing game isn’t your brand of thrills and you need a mortgage for five-plus years, consider a hybrid (part fixed and part variable). You can now find them near or under four per cent, a happy hedge with so much macro obscurity.
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Robert McLister is a mortgage strategist, interest rate analyst and editor of MortgageLogic.news. You can follow him on X at @RobMcLister.
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For the best national insured and uninsured mortgage rates, updated daily, please visit our mortgage rate page here.
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