If you’re planning to buy a home or refinance your mortgage in 2025, you’ve likely noticed headlines about rising fixed mortgage rates. After a brief period of stability, Canadian fixed mortgage rates are once again trending upward—and this shift has major implications for homeowners, first-time buyers, and investors.
So, why are fixed mortgage rates on the rise?
The answer lies primarily in the bond market. Fixed mortgage rates in Canada are closely tied to government bond yields, especially the 5-year bond. When bond yields increase—as they have in recent weeks—lenders raise fixed mortgage rates to keep up with the higher cost of borrowing. According to Canadian Mortgage Trends, yields have jumped sharply in response to persistent inflation concerns and growing doubts about near-term rate cuts from the Bank of Canada.
Many had hoped that rate cuts would come as early as mid-2025. But with inflation proving sticky, the Bank of Canada is now expected to take a more cautious approach. That means higher borrowing costs could stick around longer than anticipated.
What Does This Mean for You?
If you’re shopping for a mortgage right now, locking in a fixed rate may feel like a race against time. Rates have already risen by 30–40 basis points over the past month—and more increases could follow if bond yields remain elevated. For buyers, this impacts how much you can afford. For those with existing mortgages up for renewal, it may mean facing significantly higher monthly payments than anticipated.
Tips for Navigating the Market
1. Get Pre-Approved Now: Lock in your rate before they climb further. Most lenders allow you to hold a rate for 90–120 days.
2. Review Your Options: A variable rate mortgage may offer savings if rate cuts do occur later in the year—but be prepared for short-term fluctuations.
3. Speak to a Broker: Mortgage brokers can access multiple lenders and find competitive solutions tailored to your goals.
At Spark Mortgages, we help Canadians make informed decisions by staying ahead of market trends. Our expert brokers will walk you through your options so you feel confident in your next move.
Want to see how rising rates impact your budget? Visit our website now and try our mortgage calculator or book a free consultation to review your mortgage strategy.
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Stay informed. Stay empowered. Your mortgage matters. Visit SparkMortgages.ca to learn more.
