Rates Stable, Confidence Returning
January 28, 2026
March 18, 2026
Bank of Canada Mortgage Rate Update – March 2026
Spring may be just around the corner, but with the prime remaining as is, no surprises were sprung on us by the Bank of Canada.
Not that we were expecting a rate increase, but as is often the case, the real story isn’t in the headline, it’s in what’s happening underneath.
Let’s jump into today’s press release and read between the lines as to what it all means for your mortgage.
Today’s Press Release in 1 min
At a high level, the Canadian economy has been slowing. We’re seeing it in softer employment numbers, easing inflation, and a general cooling in activity.
At the same time, the U.S. economy continues to show strength, supported by ongoing investment, capital flowing back into domestic industries, and the continued push into AI.
That matters for us here in Canada, because U.S. inflation has a way of creeping north and putting pressure on mortgage rates.
Canadian inflation, which had been trending in the right direction, is now facing pressure from rising oil prices.
That’s the part that keeps the Bank up at night. But there’s a twist, this isn’t demand driven inflation.
It’s supply.
And while the BOC can influence demand, supply is largely out of their control.
The good news is that historically, supply issues tend to normalize once conditions settle. The question then becomes how long the events in the Middle East will continue?
Given the economic pressure that is being felt around the world, my guess would be a month at most.
Bottom line, the Bank of Canada is in a holding pattern. They’re watching how rising oil prices push inflation higher in some areas, and keeping their fingers crossed that it recedes quickly in others.
Looking Beyond The Noise
When there’s this much uncertainty, it’s easy to get caught reacting to the latest headline.
But the better approach is to step back.
Look at where we were heading before all of this.
And then ask where we’re likely to land once things settle.
Before these recent events, the trajectory was becoming clearer:
- Inflation was easing
- The labour market was softening
- Rate cuts were starting to come into the conversation
That path hasn’t disappeared.
It’s just been paused.
The big question now is timing.
If things stabilize relatively quickly, it’s not hard to see a scenario where the BOC tone leans toward easing later this year.
If oil related inflation lingers, that timeline stretches.
Either way, this doesn’t look like a period of aggressive rate increases.
In fact, much of this uncertainty was already being priced into mortgage rates as far back as December, largely due to ongoing U.S. trade tensions.
So even if rates do move slightly higher in the short term, those moves are likely to be modest and, more importantly, temporary.
So What Should You Do?
This is where strategy matters more than ever.
Not reacting.
Not trying to time the perfect moment.
But choosing a structure that fits how you want to move forward.
For many clients right now:
Three-year fixed rates are offering a strong balance.
They provide some stability, while keeping the door open if the rate environment improves.
Five-year fixed rates offer more certainty, but at a higher cost.
That can make sense if stability is the top priority.
Variable rates remain an option for those comfortable with some fluctuation.
They offer flexibility and potential upside, but they’re not the right fit for everyone. It comes down to risk tolerance and the discount from prime that you’re being offered.
Focusing on how to make your mortgage more tax efficient, or if you’re over 55, considering how to improve your cash flow to maximize contributions to your RRSP/TFSA.
Though the stock indices may be down, the breadth of the market participation suggests we are still in an upward bull market.
The Impacts on Real Estate
Though uncertainty can cause people to pause, that’s not what we are seeing right now.
The past month has brought a surge in 1st-time buyers entering the market. New applications were up significantly since our last update and new inquiries continue to come in daily.
This is super positive because 1st-time buyers tend to form the base of the broader market. The 1st time condo buyer, creates a move up townhouse/duplex buyer, who creates a move up house buyer.
It can take time for the effect to spread out, but once it gets rolling, things can heat up quickly.
If the market does slow, I expect it to be short lived.
Why I say that is because we have an unprecedented number of pre-approved clients. The majority of which have been sitting on the sidelines for the past 12-18 months waiting for the perfect moment to enter.
Those buyers aren’t going anywhere.
They represent pent-up demand that is difficult to measure and quantify, but they are there, lurking in the background.
Once the market heats up and FOMO kicks in, it will be interesting to see the impact on home prices.
Final Thoughts
If you’re thinking about making a move this year, the key isn’t predicting every rate change or trying to time the perfect market bottom.
Opportunity rarely presents itself with a bow on top.
It shows up with questions, not certainty.
It rewards those who have the faith and courage to take the leap before it’s comfortable.
How do you get the courage to leap? From knowing what to focus on.
Get clear on your Life Goals first, and the rest of the decisions will fall into place…and so will the perfect home!
…and when you do decide to take the leap, give me a call. I’ll be happy to help you figure it out on the way down!
Stay safe, stay dry, and stay away from the river banks…you don’t want to get swept up in the river of noise!
The next Bank of Canada meeting is April 29, 2026
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