Variable Rate or Fixed Rate for Renewals in 2026?
Here is what a math-based, mortgage broker with 21 years of experience and an MBA in finance looks at when deciding what to do for my own mortgage renewal.
This is a super common question as there are still 1,800,000 Canadian mortgage renewals to come before summer 2027, with the same 1.8M renewals completed since 2025.
Numbers at the top, words at the bottom.
Numbers
Variable Rate in 2024 = 6.20%
(Prime – .90% = 7.2% – .9% = 6.2% rate.)
-2.75% rate drops = 3.45% today, Jan 2026.
Variable Rate in 2026 = 3.75% today
(Prime – .70% = 4.45% – .7% = 3.75% rate.)
No rate drops expected, 2x .25% increases expected = 3.75% + .5 = 4.25% by the end of 2026.
Continued instability will lead to more rate increases later.
5-year Fixed Rates
5.09% in 2024
4.24% today – 2026
Analysis
Variable wins by .5% today, but fully expect 2 x o.25% increase in 2026 to make the rate the same as fixed rates are today, Jan 2026.
Fixed rates are now, and will continue to slowly rise, as Trump policy is highly inflationary.
If you take a variable now, and then go to lock it in later, when variable rates / prime rates start to increase, the rate you lock in at will be higher than today.
Summary
Rates look to have bottomed out right now, from looking many data points.
Fixed rates are ½% higher than the variable rates today – Jan 2026.
Then what? In 2024 I was able to precisely layout the next 18 months and predicted every rate increase exactly as it played out. Right now it is not possible to guess what will happen next month so Variable has higher risk and will probably pay more later as the rates increase as expected.
200 Word Summary
Canada’s variable-rate mortgage borrowers have enjoyed significant relief since the Bank of Canada (BoC) began cutting interest rates in 2024, but that momentum is expected to slow—and probably reverse – in 2026.
The BoC delivered 2.75% of rate cuts through 2024–2025, bringing the policy rate down to 2.25%. This helped push insured variable mortgage rates below 4%, down from around 7% in mid-2024.
However, the BoC now views inflation risks as too elevated to justify further cuts, and rate relief for variable-rate borrowers is “mostly behind us.”
The bank’s baseline forecast suggests the BoC’s policy rate could rise back toward its long-term neutral level of 2.75%, which would push variable mortgage rates up by roughly 0.5% in 2026, with additional increases probable in 2027.
Meanwhile, fixed mortgage rates have fallen less dramatically because they are tied to longer-term bond yields, which rebounded in late 2025. Borrowers have increasingly favored 3-year fixed and 5-year fixed terms, anticipating improved renewal conditions ahead when they renew later.
Bottom line: 2026 could prove challenging for variable-rate borrowers. The era of large variable-rate relief seems to be ending, and 2026 may test borrowers who relied on those lower rates — especially if the BoC keeps rates steady or reverses course
Looking at all of this, in March, I will be renewing into the 5-year fixed so I can sleep at night.
Mortgage Mark Herman, MBA, Top Calgary mortgage broker for 21 years.
5 Car Loan Strategies That Can Boost Your Mortgage Approval — An MBA-Level Approach
Top 5 Car Loan Strategies We Used for Mortgage Clients in 2025
In today’s mortgage landscape, qualification isn’t just about income and credit—it’s about strategic debt management. With an MBA in Finance and 21 years in the industry, I approach mortgage qualification the same way I would evaluate a business balance sheet: identify inefficiencies, reduce liabilities, and optimize cash flow.
One of the most overlooked opportunities to a mortgage approval is your auto loan.
Car loan rates now at their lowest point in nearly five years—6.25% to 6.99%—the math has never worked better.Mortgage Mark Herman; Best Mortgage Broker for New Home Buyers in Calgary, Alberta.
Most clients are seeing sizeable reductions in their monthly payments, which directly improves affordability ratios and increases borrowing capacity. In other words, small changes on the car side can create big changes on the mortgage side.
Why Auto Loan Optimization Matters
Mortgage lenders don’t qualify you based on total debt—they focus on monthly obligations. So even if your auto loan balance is reasonable, the payment itself may be restricting your mortgage approval.
From a financial efficiency standpoint, this is low-hanging fruit. Reducing or restructuring this one line item can dramatically shift your debt-to-income (DTI) ratio and unlock far greater mortgage purchasing power.
Top 5 Car Loan Strategies We Used for Mortgage Clients in 2025
1. Commercial Auto Loans for the Self-Employed
By shifting the vehicle loan from personal to business liability, we remove the payment entirely from your mortgage ratios. This is financial restructuring 101—use the proper balance sheet for the proper asset.
2. Auto Loan Payment Reductions
With today’s lower rates and extended terms (up to 96 months on newer models), most clients see substantial monthly reductions.
This isn’t about stretching debt—it’s about reallocating cash flow to where it has the highest ROI: qualifying for a home.
3. Cash-Back Refinancing
Lower the payment and pull out equity from your vehicle.
This can fill down payment gaps or pay off high-interest debt—another strategic reshuffling of resources to strengthen your mortgage file.
4. “Free and Clear” Mortgage-First Strategy
Sometimes paying off a car is required to get a mortgage approved.
The sophisticated move? Refinance the vehicle after closing and reimburse yourself. You maintain mortgage eligibility and preserve liquidity—exactly the type of sequencing we analyze in financial planning.
5. Co-Signer Removal
If you’ve co-signed for someone else, you’re carrying a liability without receiving the benefit.
Removing yourself restores borrowing capacity and aligns your financial profile with your actual obligations.
The Bottom Line
Your auto loan isn’t just a monthly payment—it’s a strategic lever in your overall financial picture. By applying an analytical, MBA-driven approach to debt optimization, we can often increase mortgage qualification dramatically without changing income or credit.
If you’re planning to buy a home this year, let’s look at your auto loan the way a CFO looks at a balance sheet:
Find the inefficiencies, optimize the structure, and unlock the capacity you didn’t know you had.
Mortgage Renewals – 2.75 million Canadian Mortgage Renewals Before 2028!!
Mortgage Stress Test: Why It’s Protecting Homeowners Ahead of the 2026 Renewal Wave
If you locked in your mortgage around 2% five years ago, you probably remember grumbling about the federal “stress test.” At the time, qualifying at 5.25% felt unnecessary — almost punitive. Fast forward to today, and that very safeguard is proving to be one of the smartest policies in Canadian housing finance.
The Renewal Wave Is Coming
According to the latest CMHC report, Canada is heading into a busy period of mortgage renewals:
- 750,000 mortgages will renew in the second half of 2025
- Over 1 million more in 2026
- 940,000 in 2027
Even though the Bank of Canada has cut rates nine times since its peak tightening cycle, borrowing costs remain much higher than they were during the pandemic lows. In fact, the average five-year fixed uninsured mortgage rate in July 2025 was still 67% higher than five years earlier.
“Banks are ready for the almost 3 million mortgage renewals before 2028. Lets get you a strategy on how to get the best rates on your renewal. Its a quick 10 minute phone call and we usually send you back to your own bank with the data you need to get a better rate from them OR we can move you to a bank that does get you better rates.”
Mortgage Mark Herman, Top Calgary Mortgage Broker for renewal advice
Stress Test Success
Here’s the good news: borrowers who qualified at 5.25% back in 2020 are now proving resilient. The stress test ensured they could handle payments at rates much higher than what they actually received. That foresight is paying off:
- National mortgage delinquency rates fell in Q2 2025 — the first decline since 2022.
- While Ontario and BC saw arrears climb (reflecting higher property values and loan sizes), the overall system is holding steady.
- Fears of a “renewal cliff” have eased, thanks to both the stress test and recent rate cuts.
What This Means for You
If your mortgage is coming up for renewal in 2026, now is the time to plan. Options like refinancing, adjusting amortization, or exploring different products can help smooth the transition. The stress test gave you a buffer — but proactive planning will maximize your financial flexibility.
Call to Action: If your mortgage is set to renew in the next 12–18 months, let’s talk strategy. As a mortgage broker, I specialize in helping clients navigate renewals, refinances, and complex lending scenarios. Call me today to review your options and make sure you’re ready for what’s ahead.
Reverse Mortgage Specials: October 2025
The reverse mortgage market is surging yet remains undeserved by brokers that dabble in this product.
We have been doing Reverse Mortgages since 2005, and also did the largest Reverse Mortgage ever at the time (in 2014) for $720,000!!
With millions of Canadians approaching retirement and facing a savings shortfall, now’s the time to look into REVERSE MORTGAGE Options.
Mortgage Mark Herman, expert in Canadian Reverse Mortgages
The Numbers
3M
Canadian households retiring in the next 10 years
$1M
What most Canadians believe they need to retire
$272K
Average retirement savings for Canadians 65+
That’s a $728K gap—and reverse mortgages can help close it.
Right now 2 of the 3 big lenders have a special on.
- Available in AB, BC, ON, QC
- We’ll beat any posted rate for comparable reverse mortgages
HIGHLIGHTS of these lenders and their reverse mortgages:
- Tax-free cash for:
- Paying off an existing mortgage
- Debt consolidation
- Health care & renovations
- Living inheritance & gifts
- No monthly payments required
- No impact on federal retirement benefits
- 100% home ownership retained⁶
- Preserve investments & legacy while aging in place
Ready to start the conversation?
Reach out today to discover how reverse mortgages can grow your business—and help your clients thrive.
Reach me direct at 403- six81- 437six
I answer from 9-9 x 365.
#1 Mortgage Rate SPECIAL in Canada ⚡
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Canadian Residential Market Update
Fixed rates are slowly rising due to Trump’s inflationary policies and we see that continuing until tariffs are sorted out.In the mean time, now is a great time to buy as inventory is high and rates are only .4% above where they were before Covid.Mortgage Mark Herman, Top Calgary mortgage broker specializing in 1st time buyers.
Bank of Canada keeps interest rate policy unchanged for July 2025
The Bank of Canada announced today that it is keeping its benchmark interest rate at 2.75%.
This was widely expected and reflects the Bank’s expert interpretation of current macroeconomic data, including inflation.
Mark Herman, best Calgary mortgage broker for first time buyers.
The Bank’s observations are summarized with our outlook below.
Canadian Economic Performance and Employment
- In Canada, US tariffs are disrupting trade but overall, the economy is showing some resilience so far
- After robust growth in the first quarter of 2025 due to a pull-forward in exports to get ahead of tariffs, Canadian GDP likely declined by about 1.5% in the second quarter, a contraction mostly due to a sharp reversal in exports following the pull-forward, as well as lower US demand for Canadian goods due to tariffs
Growth in business and household spending is being restrained by uncertainty
Labour market conditions have weakened in sectors affected by trade, but employment has held up in other parts of the economy
The unemployment rate has moved up gradually since the beginning of the year to 6.9% in June and wage growth has continued to ease
A number of economic indicators suggest excess supply in the economy has increased since January
Canadian Inflation and Shelter Prices
- Inflation measured by the Consumer Price Index (CPI) was 1.9% in June, up slightly from the previous month.
- Excluding taxes, inflation rose to 2.5% in June, up from around 2% in the second half of last year, largely reflecting an increase in non-energy goods prices
High shelter price inflation remains the main contributor to overall inflation, but it continues to ease
Based on a range of indicators, underlying inflation is assessed to be around 2½%.
Global Economic Performance, Bond Yields and F/X
- While US tariffs have created volatility in global trade, the global economy has been reasonably resilient
In the United States, the pace of growth moderated in the first half of 2025, but the labour market has remained solid
US CPI inflation “ticked up” in June with some evidence that tariffs are starting to be passed on to consumer prices
The euro area economy grew modestly in the first half of the year
In China, the decline in exports to the United States has been largely offset by an increase in exports to the rest of the world
Global oil prices are close to their levels in April despite some volatility
Global equity markets have risen, and corporate credit spreads have narrowed
Longer-term government bond yields have moved up
Canada’s exchange rate has appreciated against a broadly weaker US dollar
No GDP Projections in July Monetary Policy Report
While some elements of US trade policy have started to become “more concrete” in recent weeks, the Bank notes that trade negotiations are fluid, threats of new sectoral tariffs continue, and US trade actions remain unpredictable.
Against this backdrop, the Bank’s July Monetary Policy Report does not present conventional base case projections for GDP growth and inflation in Canada and globally. Instead, the Report presents a current tariff scenario based on tariffs in place or agreed as of July 27, and two alternative scenarios—one with an escalation and another with a de-escalation of tariffs.
Modest Growth Outlook
The Bank notes that the current tariff scenario has global growth slowing modestly to around 2.5% by the end of 2025 before returning to “around 3%” over 2026 and 2027.
The Bank further postulates that in the current tariff scenario, after contracting in the second quarter, GDP growth picks up to about 1% in the second half of this year as exports stabilize and household spending increases gradually. In this scenario, economic slack persists in 2026 and diminishes as growth picks up to close to 2% in 2027. In the de-escalation scenario, economic growth rebounds faster, while in the escalation scenario, the economy contracts through the rest of this year.
In the current tariff scenario, the Bank would expect total inflation to stay close to 2% over the scenario horizon as the upward and downward pressures on inflation roughly offset. However, it notes there are risks around this inflation scenario. As the alternative scenarios illustrate, lower tariffs would reduce the direct upward pressure on inflation and higher tariffs would increase it. In addition, many businesses are reporting costs related to sourcing new suppliers and developing new markets. These costs could add upward pressure to consumer prices.
With still high uncertainty, the Canadian economy showing some resilience, and ongoing pressures on underlying inflation, the Bank’s Governing Council decided to hold the policy interest rate unchanged.
It offered that it will continue to assess the timing and strength of both the downward pressures on inflation from a weaker economy and the upward pressures on inflation from higher costs related to tariffs and the reconfiguration of trade. If a weakening economy puts further downward pressure on inflation and the upward price pressures from the trade disruptions are contained, the Bank offered that “there may be a need for a reduction in the policy interest rate.”
Final comments
Governing Council added that it is proceeding carefully, with particular attention to the risks and uncertainties facing the Canadian economy. These include: the extent to which higher US tariffs reduce demand for Canadian exports; how much this spills over into business investment, employment and household spending; how much and how quickly cost increases from tariffs and trade disruptions are passed on to consumer prices; and how inflation expectations evolve.
I added: “We are focused on ensuring that Canadians continue to have confidence in price stability through this period of global upheaval. We will support economic growth while ensuring inflation remains well controlled.”
Next scheduled BoC rate announcement
The Bank is scheduled to make its next scheduled policy interest rate decision of 2025 on September 17th.
Probably the end of Mortgage Rate Reductions for Canada
Expert opinions on Bank of Canada interest rate cuts are shifting. A growing number of market watchers are backing away from their predictions of two more reductions this year. Several are now saying the Bank has likely reached the end of the current trimming cycle.
Back in April we said that Prime is probably going to stay where it is now; discounting the expected 4 more reduction to 0.
that looks to have come true.
5-year fixed is the way to go to side-step all the world’s recent happenings .
Mortgage Mark Herman, best Calgary mortgage broker near me.
The central bank held its trend-setting Policy Rate at 2.75% for a second time in its decision on June 4. Since then, inflation numbers and Gross Domestic Product readings have given the BoC reasonable grounds to stand pat.
Statistics Canada’s latest figures for GDP show it declined by 0.1% in April compared to March. Much of that decline was led by the manufacturing sector, which is falling victim to U.S. tariffs and trade uncertainty. A similar reduction is forecast for May. While many economists admit the slowdown shows the economy is softening, they say it is not on the verge of collapse. GDP is 1.3% higher that it was a year earlier.
The other key factor in the Bank’s rate decisions, inflation, held steady at 1.7% in May. That headline number is actually below the Bank’s target of 2.0% and would normally suggest there is room for a further rate cut. However, that is a little deceiving.
Headline inflation (aka the Consumer Price Index) continued to be skewed by the elimination of the consumer carbon tax. As well, core inflation, which is the BoC’s preferred measure, remains stuck at 3.0%, which is the high end of the Bank’s desired inflation range.
The Bank finds itself trying to balance economic growth against the risk of rising inflation. The Bank’s next interest rate announcement is set for July 30.
Canadian Mortgage Economic Data, June 4th, 2025
The Bank of Canada announced today that it is keeping its benchmark interest rate at 2.75%, unchanged from April (and March) of 2025.
As noted under “Rationale”, the Bank appears to be in a holding pattern until it gains more information on the direction of US trade policy and its impact on Canada.
Below, is a summary of the Bank’s observations and its outlook.
Summary – the 5-year fixed is the best option for June 2025 and July 2025 so far. ensure you get a rate hold are rates are creeping up.
Mortgage Mark Herman, top Calgary Mortgage Broker for First Time Buyers
Canadian Economic Performance, Housing, Employment and Outlook
- Economic growth in the first quarter came in at 2.2%, slightly stronger than the Bank had forecast, while the composition of GDP growth was largely as expected
- The pull-forward of exports to the United States and inventory accumulation boosted activity, with final domestic demand “roughly flat”
- Strong spending on machinery and equipment held up growth in business investment by more than expected
- Consumption slowed from its very strong fourth-quarter pace, but continued to grow despite “a large drop” in consumer confidence
- Housing activity was down, driven by a sharp contraction in resales; government spending also declined
- The labour market has weakened, particularly in trade-intensive sectors, and unemployment has risen to 6.9%
- The economy is expected to be considerably weaker in the second quarter, with strength in exports and inventories reversing and final domestic demand remaining subdued
Canadian Inflation
- Inflation eased to 1.7% in April, with the elimination of the federal consumer carbon tax shaving 0.6 percentage points off the Consumer Price Index
- Excluding taxes, inflation rose 2.3% in April, slightly stronger than the Bank had expected
- The Bank’s preferred measures of core inflation, as well as other measures of underlying inflation, moved up
- Recent surveys indicate that households continue to expect that tariffs will raise prices and many businesses say they intend to pass on the costs of higher tariffs
- The Bank will be watching all of these indicators closely to gauge how inflationary pressures are evolving
Global Economic Performance
- While the global economy has shown resilience in recent months, this partly reflects a temporary surge in activity to get ahead of tariffs
- In the United States, domestic demand remained relatively strong but higher imports pulled down first-quarter GDP
- US inflation has ticked down but remains above 2%, with the price effects of tariffs still to come
- In Europe, economic growth has been supported by exports, while defence spending is set to increase
- China’s economy has slowed as the effects of past fiscal support fade; more recently, high tariffs have begun to curtail Chinese exports to the US
- Since financial market turmoil in April, risk assets have largely recovered and volatility has diminished, although markets remain sensitive to US policy announcements
- Oil prices have fluctuated but remain close to their levels at the time of the April Monetary Policy Report
Rationale
With uncertainty about US tariffs still high, the Canadian economy softer but not sharply weaker, and some unexpected firmness in recent inflation data, the Bank’s Governing Council decided to hold the policy rate steady “as we gain more information on US trade policy and its impacts.
Looking Ahead: Uncertainty Remains High
The Bank noted that since its April Monetary Policy Report, the US administration has continued to increase and decrease various tariffs. China and the United States have stepped back from extremely high tariffs and bilateral trade negotiations have begun with a number of countries. However, the Bank said the outcomes of these negotiations “are highly uncertain,” tariff rates are well above their levels at the beginning of 2025, and new trade actions are still being threatened. Uncertainty remains high.
As a result, the Bank says it is proceeding carefully, with particular attention to the risks and uncertainties facing the Canadian economy. These include: the extent to which higher US tariffs reduce demand for Canadian exports; how much this spills over into business investment, employment and household spending; how much and how quickly cost increases are passed on to consumer prices; and how inflation expectations evolve.
Final comments
Today’s announcement ended with the following statement from the Bank’s Governing Council: “We are focused on ensuring that Canadians continue to have confidence in price stability through this period of global upheaval. We will support economic growth while ensuring inflation remains well controlled.”
Next scheduled BoC rate announcement
The Bank is scheduled to make its fifth policy interest rate decision of 2025 on July 9th.
GST Rebate for 1st Time Home Buyers
We have had lots of questions about this proram.
The legislation has been tabled, but is not done yet. As of today, and it is for contracts written May 27, 2025 or later.
Updates as they come in.
We have a 4-plex buyer who is purchasing a newly constructed 4-plex in Calgary at $1,250,000. His rebate is about 60k – now that is now pretty substantial!
Mortgage Mark Herman, 1st time buyer and move up mortgage specialist in Calgary Alberta.