A lot of movement, not a lot of clarity
If you've been watching rates or the news lately, you can probably feel it — things aren't exactly steady right now. There's a push and pull happening between economic data, inflation, and what's going on globally, and it's all starting to show up in mortgage rates.
Jobs rebounded a bit, but confidence didn't
Canada added 14,000 jobs in March. That's a positive headline, especially after losing around 110,000 jobs across January and February. But zooming out, it looks more like a small rebound than a strong recovery.
At the same time, consumer confidence dropped to an eleven-month low. Two main reasons: rising energy costs right now, and longer-term uncertainty around global trade.
US inflation came in hotter than expected
In the US, inflation jumped from 2.4% in February to 3.3% in March. A big part of that was higher gas prices.
Now, central banks usually look through a spike like that if it's temporary. Even Jerome Powell pointed out recently that energy shocks tend to come and go fairly quickly. The real question is whether those higher energy costs start pushing up prices across the rest of the economy.
So far, we're not really seeing that. Core inflation — which strips out food and energy — only ticked up slightly from 2.5% to 2.6%.
But here's where things get more uncertain
Over the weekend, the US and Iran failed to reach a peace agreement. The US is now blocking ships leaving Iran from moving through the Strait of Hormuz — a key global shipping route — and Iran has threatened to restrict other traffic moving through it as well.
As you'd expect, oil prices have already jumped again.
The longer this situation drags on, the more time those higher energy costs have to work their way into the broader economy.
This still doesn't look like COVID-era inflation
Even with all of that, this doesn't look like a repeat of the inflation spike we saw during COVID.
Back then, people had excess cash, borrowing was cheap, and wage growth was strong. That combination really accelerated inflation.
Today, it's the opposite. Borrowing costs are already high, demand is softer, and workers don't have the same leverage to push wages higher. That actually helps limit how far inflation can spread, even if energy prices stay elevated.
So for now, both the Bank of Canada and the Fed are taking a wait-and-see approach.
What this means for your mortgage rate
Bond yields were pretty volatile last week but ended slightly lower overall. That's helped fixed rates stabilize for the moment, but don't expect a straight line from here. There's still a lot of uncertainty in the background.
Variable rate discounts didn't really change.
One interesting shift — the bond market has already started dialing back expectations for future rate hikes. A couple of weeks ago, markets were pricing in about 0.75% in hikes for 2026. Now that's closer to 0.50%. Sentiment is already adjusting.
My view hasn't changed — I still think the next move from the Bank of Canada is more likely to be a cut than a hike. Even with the current energy shock, I expect the longer-term impact of trade changes to be more deflationary.
Where do we go from here?
Fixed rates have been moving up. If you're planning to buy in the next 90 to 120 days, locking in a rate hold right now makes a lot of sense.
Most people are still choosing fixed for the stability, and I completely understand why. Between 3-year and 5-year fixed, if the pricing is close, I generally lean toward the 5-year for better overall value.
That said, variable rates are starting to look more attractive again from a cost standpoint. I still believe variable will come out ahead over the full term — but there's no question it could be a bumpier ride, especially with everything happening globally right now.
If this conflict drags on long enough and inflation starts to spread more broadly, there could come a point where the Bank of Canada has to tighten again. I don't think we're there — but it's something to be aware of.
If you're considering variable, you need to be comfortable with that risk, both mentally and financially.
Don't just look at what you can afford — look at what feels comfortable
Don't base your decision on what a lender says you can afford. They're not thinking about your life outside the mortgage — saving, travel, flexibility, all of it.
The better approach is to build your plan around what feels comfortable for you, not the maximum number on paper. That's how you stay in control long-term.
