Fixed mortgage rates have fallen substantially since they hit their peak in October 2023. At the time, pretty much all fixed rates were over 6%. Fast forward to today, and there are now fixed rates as low as 3.74%… depending on your specific situation. 

When mortgage rates are in a downward trend, it can be easy to get caught up in the excitement, often waiting to see how low they will go. But waiting to lock in a rate can be a costly move.

There is now a major threat to low mortgage rates which could send them climbing once again. 

 

Inflation: The Party Pooper of Low Mortgage Rates 

After peaking at a fiery 8.1% in June 2022 (the highest in 40 years), inflation cooled off nicely, dropping to 1.8% in December 2024. But just when we thought we were out of the woods, it crept back up—first to 1.9% in January, then leaping to 2.6% in February.

This inflation spike caught economists off guard, despite the end of the federal tax holiday (which they did expect to nudge prices up). The bond market? It didn’t take the news well—yields shot up. And when bond yields rise, fixed mortgage rates often follow suit.

There are currently 5-year fixed rates available as low as 3.74% for insured mortgages or purchases under $1 million and with a minimum down payment of 35%. But even in the higher, uninsurable rate category, the lowest 5-year fixed rates have fallen into the range of 3.99% to 4.09%. 

For comparison, the lowest variable rates how have the tight range of prime -0.90% to prime -0.85% (currently 4.05% to 4.10%). This covers the majority of situations for owner occupied properties. 

So far, rising bond yields haven’t pushed up mortgage rates yet—but if the trend keeps climbing, expect fixed rates to follow.

 

Will Fixed Mortgage Rates Go Up? Ask Trump. Seriously.

This may sound wild, but one of the biggest factors in the rate outlook right now is… Donald Trump. And more specifically, whatever mood he’s in about tariffs that day.

One day he’s gung-ho on imposing reciprocal tariffs by April 2nd. The next day, he’s playing softball:

“I may give a lot of countries breaks, but it’s reciprocal. But we might be even nicer than that.”

Classic Trump—like a box of chocolates. You never know what you’re gonna get.

Here’s the impact:

  • If the tariffs hit hard, expect bond yields to fall, relieving pressure on fixed rates.
  • If he backs off, inflation becomes the main concern again, and bond yields could keep rising—dragging fixed rates up with them.

In short, Trump’s trade stance could steer where mortgage rates head next. You can’t make this stuff up.

 

What’s the Bank of Canada Thinking?

I covered this in more detail with last week’s blog, but here’s the quick-and-dirty:

  • Five of the Big Six banks expect the Bank of Canada to cut rates by 0.50% to 0.75% before the end of Q3.
  • Scotiabank is off on its own little island, predicting no cuts through 2026.

As for the upcoming April 16th BoC announcement? Markets are only pricing in a 27% chance of a rate cut. Meaning a 73% chance of no change.

Again, if tariffs come down hard, the chances of a cut increase. If they don’t, the BoC is likely to keep rates steady—for now.

 

My Final Thoughts: The Crystal Ball is Cloudy

Trying to predict where mortgage rates are headed right now is like trying to predict what Trump will tweet next. It’s chaos theory.

Yes, many expect rates to keep falling this year—but that’s not a guarantee, especially now that inflation is waking up from its nap. And with Trump potentially reigniting global trade drama, everything is still very much in flux.

That’s why personalized advice matters more than ever. My team at PMT Mortgage is here to help you navigate it all—fixed vs. variable, short-term vs. long-term. There’s no one-size-fits-all answer. And as I say in my book Beat the Bank, the there is no one size fits all mortgage advice. What’s right for your friends may not be the best path for you. Everyone’s situation is a bit different. 

If you’re buying or renewing within the next 120 days—contact us to lock in a rate. Now. No crystal ball needed.

  • If rates drop? We’ll get you the lower rate. Even if you have already signed. 
  • If they rise? You’ll be protected.

Either way, we’ve got your back. Rate monitoring until closing is just part of what we do.

As for what happens with tariffs and mortgage rates in the near future?  Time will tell and anything can happen.