{"id":427539,"date":"2026-01-23T07:08:15","date_gmt":"2026-01-23T07:08:15","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/427539\/"},"modified":"2026-01-23T07:08:15","modified_gmt":"2026-01-23T07:08:15","slug":"four-tried-and-true-borrowing-tips-for-confused-mortgage-shoppers","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/427539\/","title":{"rendered":"Four tried-and-true borrowing tips for confused mortgage shoppers"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

A worker shovels snow in front of the Bank of Canada building in Ottawa in December. Ongoing global turmoil means interest rates could drop, rise or stay flat this year.Sean Kilpatrick\/The Canadian Press<\/p>\n

The saying \u201cuncertainty is the only certainty\u201d surely applies to Canada\u2019s mortgage market. <\/p>\n

We\u2019re barely a month into the new year, and the interest-rate narrative has already shifted amid fresh geopolitical upheaval and domestic data \u2013 and it will probably change again before the year is through.<\/p>\n

Initially, borrowers were told to expect that the Bank of Canada would keep its benchmark rate on hold for the majority of the year, before inflation spells the need to raise it in late 2026 or early 2027. <\/p>\n

However, the latest December inflation numbers have eased those rate-hike expectations; the report revealed a sustained cooling in the core measures of inflation that the bank tracks, showing that it\u2019s inching closer to its 2-per-cent target. <\/p>\n

Should these core measures drop further, it could give the BoC room to cut rates this year, rather than increase or continue holding them.<\/p>\n

Editorial: The tectonic shift of long-term higher interest rates<\/a><\/p>\n

But borrowers shouldn\u2019t celebrate yet \u2013 such rate cuts are far from a sure thing. More U.S. trade confusion could again pressure consumer prices and reanimate the chances of a hike.<\/p>\n

The landscape isn\u2019t much clearer for fixed rates, which are currently in the upper-3-per-cent range. Global bond yields have been elevated since December, as investors avoid U.S. bonds owing to the country\u2019s erratic foreign policy. <\/p>\n

However, that same turmoil could cause yields \u2013 which lenders use to price fixed mortgage rates \u2013 to also fall this year, should investors feel market risk is subsiding. <\/p>\n

The take-away: The path for 2026 interest rates is anyone\u2019s guess. Today\u2019s mortgage shoppers are likely fatigued, or downright confused, about how to choose the best rate. Here are some things to consider: <\/p>\n

1. Look at the spread when deciding between fixed and variable<\/p>\n

Right now, variable mortgage rates are cheaper: the lowest floating rate in Canada is currently 3.45 per cent<\/a>, 39 basis points below the best five-year fixed at 3.84 per cent<\/a>. That\u2019s not a ton of wiggle room should the BoC start to raise rates again \u2013 a single 25-basis-point increase would rapidly whittle down the difference, and a second would again position variable rates as the pricier option. (There are 100 basis points in a percentage point.)<\/p>\n

The tricky part here is you must have conviction in your own beliefs. If you expect at least two more hikes over the course of your mortgage term, it can make sense to lock into a fixed as the most likely scenario where you\u2019ll save.<\/p>\n

2. Base it on your budget <\/p>\n

The biggest risk when choosing a variable rate is that it may rise during your term, causing either your monthly payment, or the portion of it that services interest, to increase. Of course, the opposite can also happen \u2013 if you\u2019re lucky enough to hold one during a central bank cutting cycle, having a floating rate can really pay off. <\/p>\n

What\u2019s key here is knowing if your monthly mortgage budget can absorb an increase, by how much, and how many theoretical rate hikes it would take to get there. As mentioned above, if you think more hikes are likely, fixed may be the more financially prudent choice.<\/p>\n

The week\u2019s best fixed and variable mortgage rates<\/a><\/p>\n

3. Have an exit strategy <\/p>\n

One of the nice things about variable-rate mortgages is that they\u2019re cheaper to break midterm, with lenders charging just three months\u2019 worth of interest. This is unlike a fixed mortgage term, where you\u2019ll be charged an Interest Rate Differential (IRD) \u2013 a complicated calculation determined by your lender. Many lenders will also offer the ability to convert a variable rate into a fixed option at any time. Look for this feature if you think you\u2019ll need to bail midterm.<\/p>\n

4. Don\u2019t discount peace of mind <\/p>\n

One of the reasons fixed mortgage rates are historically priced higher than variable is that you pay a premium for security. In a fixed-rate mortgage, your payment will never fluctuate during your term, regardless of what\u2019s happening in the financial markets. For some people, that consistency counts for a lot. If market machinations and monetary policy give you anxiety, a fixed rate may be the way to go \u2013 regardless of price.<\/p>\n

Penelope Graham is the head of content at Ratehub.ca<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: A worker shovels snow in front of the Bank of Canada building in…\n","protected":false},"author":2,"featured_media":427540,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[45,49,48,46,5756],"class_list":["post-427539","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-ca","tag-canada","tag-economy","tag-yesapplenews"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/427539","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=427539"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/427539\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/427540"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=427539"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=427539"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=427539"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}