Canadian Mortgage Rate Predictions for 2026: An In-Depth Analysis

Canadian Mortgage Rate Predictions for 2026: An In-Depth Analysis

As we approach 2026, understanding the trajectory of Canadian mortgage rates is crucial for prospective homebuyers, current homeowners, and real estate investors. This article delves into current trends, economic factors influencing mortgage rates, expert forecasts, and the potential impacts on the Canadian real estate market.

Current Trends in Canadian Mortgage Rates

In recent years, Canadian mortgage rates have experienced significant fluctuations. As of October 2025, the Bank of Canada (BoC) has set its policy rate at 2.5%, a reduction from previous years aimed at stimulating economic growth amid global uncertainties. This adjustment has led to a corresponding decrease in both fixed and variable mortgage rates.

Fixed Mortgage Rates:

• 5-Year Fixed Rates: Currently range between 3.85% and 4.50%. (truenorthmortgage.ca)

Variable Mortgage Rates:

• 5-Year Variable Rates: Approximately 3.75%, reflecting the BoC's recent rate cuts. (wowa.ca)

Economic Factors Influencing Mortgage Rates

Several key economic factors are poised to influence Canadian mortgage rates as we move into 2026:

1. Inflation Trends:

2. The BoC remains committed to its 2% inflation target. Governor Tiff Macklem emphasized the importance of maintaining this target to ensure economic stability. (mpamag.com)

3. Economic Growth:

4. The BoC has revised its growth forecasts for 2025 and 2026, projecting a growth rate of 1.8% for both years