🏡 FIXED VS. VARIABLE MORTGAGE RATES IN CANADA 2026 | WHAT YOU NEED TO KNOW
Why are fixed mortgage rates rising in Canada while variable rates remain relatively stable? And how could choosing the right mortgage save you thousands?
In this week's Finance Fridays, I explain why fixed and variable mortgage rates move differently, how the Bank of Canada and bond yields influence borrowing costs, and what homeowners should consider before buying, refinancing or renewing.
📈 WHY ARE FIXED RATES RISING?
Fixed mortgage rates are influenced by Government of Canada bond yields, inflation expectations and lender funding costs.
Variable rates generally follow lenders' prime rates, which are strongly influenced by the Bank of Canada's overnight rate.
This means fixed rates can increase even when the Bank of Canada holds its policy rate steady.
🇨🇦 BANK OF CANADA — OCTOBER 28, 2026
With another interest rate announcement approaching, inflation, employment, economic growth, trade uncertainty and U.S. monetary policy will all be important factors to watch.
💰 FIXED VS. VARIABLE: $500,000 MORTGAGE
25-year amortization | Monthly payments
🔒 3-Year Fixed at 4.59%
Monthly payment: $2,792
📉 5-Year Variable at 3.65%
Monthly payment: $2,536
That's approximately $256 less per month with variable!
If rates remain unchanged:
✅ Approximately $13,645 less interest over 3 years.
✅ Approximately $22,436 less interest over 5 years, assuming the fixed mortgage renews at 4.59% after year three.
📊 WHAT IF VARIABLE RATES INCREASE?
3.65% → $2,536/month
3.90% → $2,605/month
4.15% → $2,671/month
4.40% → $2,739/month
4.65% → $2,810/month
Variable rates would need to increase approximately 94 basis points to match the 4.59% fixed rate.
These are illustrative payments based on the original mortgage balance. Actual variable payments depend on the product and timing of rate changes.
🎥 IN THIS VIDEO:
✅ Why fixed mortgage rates are rising
✅ How bond yields affect mortgage rates
✅ How Bank of Canada decisions influence variable rates
✅ 3-year fixed vs. 5-year variable comparison
✅ Monthly payments and potential interest savings
✅ Mortgage penalties, flexibility and risk
🏠 THE BOTTOM LINE
The lowest rate isn't always the best mortgage.
Fixed mortgages offer payment certainty and protection against rising rates. Variable mortgages may offer lower borrowing costs but carry interest rate risk.
The right choice depends on your financial goals, budget, future plans and comfort with uncertainty.
📞 LET'S TALK MORTGAGES!
With over 15 years of experience, I help Canadians make informed mortgage decisions.
Anthony Venuto
Mortgage Broker Level 2
InTouch Mortgage Solutions
CENTUM Finding the Right Mortgage Inc.
FSRA #11789
🌐 www.intouchmortgages.ca
📧 avenuto@intouchmortgages.ca
📱 416-895-8212
Serving Vaughan, Woodbridge, Toronto, the GTA and Ontario.
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💬 Are you currently in a fixed or variable mortgage? Comment below!
Disclaimer: Illustrative calculations using a $500,000 mortgage, 25-year amortization and Canadian semi-annual compounding. Five-year savings assume unchanged variable rates and a fixed renewal at 4.59%. Actual results vary.
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