The Tariff War & Mortgages

With new tariffs hitting Canada and the economy shifting, mortgage rates are all over the place. This may leave some feeling anxious about where rates will be when they go to purchase a home or renew their current mortgage.

Do You Go Fixed or Variable?

Here's the breakdown on a fixed-rate mortgage:

✅ Locked-In Rate: No surprises when it comes to payment - it stays the same.

✅ Good if Rates Go Up: You're protected from future rate hikes.

❌ Bad if Rates Go Down: You'll pay more over time as variable rates trend down.

❌ Expensive to Break: If you want to refinance early, pre-payment penalties could be costly.

But what about a variable-rate mortgage?

✅ Historically outperforms fixed rates.

✅ Less costly to break.

❌ Rates Could Go Up: BoC rates are expected to drop, but if they don't you could end up paying more.

❌ Uncertainty: Your payment fluctuates from month to month.

What's Happening in the Market?

5-year bond yields are dropping, which usually signals lower fixed rates ahead. The Bank of Canada could cut rates in response to an economic slowdown, but on the flip side, tariffs could create inflation risks. This makes things a little more unpredictable.

So What's the Best Option?

If you're not a risk-taker and like the idea of consistency when it comes to your mortgage payment - a fixed-rate mortgage would be the way to go. However, if you can handle some short-term ups and downs for potential long-term savings - a variable rate may be the way to go for you.

Mortgages Aren't One-Size-Fits-All!

What works for someone you know may not work for you. Reach out if you want a personalized mortgage solution that works for you!