Well, that was unexpected
Canada's job market threw another curveball last week, adding a surprising 67,000 jobs in October—far more than the forecasts expected, which called for a decline. That's the second straight month of stronger-than-expected employment gains, signaling our economy still has some punch left in it.
But before we start celebrating an economic boom, let's zoom in on what this really means for your mortgage strategy.
The numbers tell only part of the story
Despite those big employment numbers, most of the new positions were part-time, and the unemployment rate—although slightly down to 6.9%—is still higher than where we started the year. Wage growth inched up to 3.5%, but that's still running softer than earlier in the cycle. Combine that with persistent 'soft labour market' comments from the Bank of Canada (BoC), and it's clear the headline numbers don't tell the whole story.
And that brings us to interest rates—and what they're (not) doing.
Fixed rates stayed flat, and the Bank's on pause
The latest jobs data gave a little jolt to Government of Canada bond yields (which influence fixed mortgage rates), but not enough to shift pricing in a meaningful way. Fixed mortgage rates stayed largely flat last week. Phew.
Meanwhile, the BoC's recent policy rate cut to 2.25% still holds. The Bank made it clear that it sees this level as 'about right' for now—and that it'll take more than just one or two strong jobs reports to rethink its direction. Translation? The BoC's rate pause is likely to stick through the first quarter of 2026, barring any major surprises.
Where do we go from here?
If the Bank's own estimates hold true—and it eventually aims for a more stimulative policy rate closer to 2%—there may still be room for further rate cuts later in 2026. That would provide more breathing room for variable-rate mortgage holders, even if gains are gradual.
So what's the play for your mortgage right now?
Fixed-rate mortgages—especially 5-year and well-discounted 3-year terms—are priced at or slightly above their historical averages. No screaming deals, but no red flags either. If peace of mind and long-term consistency are your thing, you're in okay shape here.
But if you've got a higher tolerance for short-term unpredictability, variable rates still hold intriguing value—particularly with the expectation of more rate cuts down the line. Current variable pricing won't win any lowest-rate awards in the short run, but there's a good chance they'll pay off over the full term if the BoC resumes easing later.
One note if you're shopping beyond the big banks: Non-bank lenders continue to offer competitive pricing—often with more flexible contract terms. Worried what might happen if your non-bank lender hits tough times? Rest easy. Canada's mortgage system is highly regulated, and our lenders—even those without a household name or a branch on every corner—are notably robust. We're light years away from any Lehman Brothers-style risks here.
