For mortgage rates this week, it's the calm before the storm

Canada's mortgage rates are steady this week, but changes are on the horizon with an expected Bank of Canada interest rate cut. Rates were initially spiking, but major lenders have held steady, awaiting Wednesday's decision. The Bank’s move could spark more affordable variable-rate options for those anticipating further rate reductions through 2025.

Currently, variable-rate mortgages are the best deals for borrowers optimistic about continued rate cuts. However, many are still opting for fixed-rate mortgages, especially shorter-term three-year options, though these come with higher lender pricing restrictions.

The one-year fixed mortgage rate, for instance, has only slightly reduced over the past year, staying relatively high compared to bond market drops. This reflects a trend where banks aren’t offering major discounts on shorter-term rates, which remain around 5.99%.

This potential shift by the Bank of Canada could finally signal significant changes, with analysts watching closely to see if variable rates will become a more popular choice if lending becomes more affordable. As always, the mortgage market remains a key indicator for homeowners and prospective buyers alike.