{"id":839518,"date":"2026-08-01T03:12:37","date_gmt":"2026-08-01T03:12:37","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/839518\/"},"modified":"2026-08-01T03:12:37","modified_gmt":"2026-08-01T03:12:37","slug":"with-iran-war-uncertainty-and-new-tariff-threats-should-you-go-with-a-fixed-or-variable-mortgage","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/839518\/","title":{"rendered":"With Iran war uncertainty and new tariff threats, should you go with a fixed or variable mortgage?"},"content":{"rendered":"

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

One Toronto area mortgage broker says odds are in favour of the variable rate going up, not down.Evan Buhler\/The Canadian Press<\/p>\n

People often ask Victor Tran, a mortgage broker in the Toronto area, whether they should choose a variable mortgage in case the Bank of Canada cuts interest rates.<\/p>\n

But ever since the war in Iran started, and now as the United States has threatened new tariffs on Canadian goods, he has consistently told them that odds are actually in favour of the variable rate going up, not down. <\/p>\n

Bond swaps markets, which capture investor expectations around interest rates, are largely predicting a quarter-point rate hike from the Bank of Canada by the end of 2026, according to Bloomberg data. The central bank is also expected to implement one or possibly two more hikes in 2027.<\/p>\n

Analysis: The Big Six banks control 85% of deposits, yet their rates rank near last<\/a><\/p>\n

Inflation resulting from the Middle East conflict, which has led to a surge in oil prices, is one major reason why many analysts believe rate hikes may be necessary. The risk of an intensifying trade war and the effects on the Canadian economy could present a reason to cut rates, but many economists say a cut may not be necessary given that the economy has been surprisingly resilient. <\/p>\n

The spread between the cheapest available five-year variable mortgage and three-year fixed rate on Ratehub.ca<\/a> was roughly 60 basis points as of Thursday afternoon. (There are 100 basis points in a single percentage point.) <\/p>\n

Mr. Tran says the spread can be even smaller for some clients, depending on the actual rates they\u2019re quoted, meaning there\u2019s potentially little advantage for the higher risk.<\/p>\n

\u201cAll it would take is for the Bank of Canada to increase once or twice, and the variable will be either the same or higher than what fixed rates are,\u201d he said.<\/p>\n

That\u2019s why Mr. Tran recommends most of his clients to get a fixed-rate mortgage. One of the only scenarios where he\u2019d recommend a variable rate is if a homeowner expects to sell their home or make a large lump-sum payment toward their mortgage. <\/p>\n

The penalty for breaking a variable mortgage is generally just three months of interest, whereas fixed-rate mortgages come with the risk of paying a more costly difference between the homeowner\u2019s mortgage rate and the bank\u2019s posted rate.<\/p>\n<\/p>\n

Mortgage rates are sourced by Ratehub.ca. For a comprehensive list of today\u2019s mortgage rates for each term\/type, visit ratehub.ca\/best-mortgage-rates<\/a>.<\/p>\n

Ratehub.ca is a mortgage-rate comparison marketplace and mortgage brokerage. It helps millions of Canadians compare and obtain the best mortgage rates, credit cards, insurance, deposits and loan products.<\/p>\n

Rates shown are the lowest available for each term\/type and category (insured versus uninsured) as of market close on Thursday.<\/p>\n

What do you want to know about mortgages?<\/p>\n

\nDo you have a mortgage question for our expert? Is a variable or fixed rate the best option? Does it make financial sense to refinance? Is it better to consult your bank or go to a mortgage broker? <\/p>\n

Submit your questions below and Ratehub’s Penelope Graham could answer it in an upcoming column.<\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: One Toronto area mortgage broker says odds are in favour of the variable…\n","protected":false},"author":2,"featured_media":839519,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[45,49,48,46,2741],"class_list":["post-839518","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-ca","tag-canada","tag-economy","tag-pf-ca"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/839518","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=839518"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/839518\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/839519"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=839518"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=839518"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=839518"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}