Posted On Mar 27, 2026

The Bank of Canada held its policy rate steady again last week.

Most headlines focused on one thing: variable mortgage rates.

But the reality is that many borrowers either have fixed-rate mortgages — or are trying to decide whether to move from variable to fixed.

Understanding what happens next matters more than the announcement itself.

 

What This Means for Variable-Rate Mortgage Holders

If you have a variable-rate mortgage, a rate hold means:

  • Your payment likely stays the same

  • Your interest rate remains tied to prime

  • Future rate moves remain uncertain

Many variable-rate borrowers started with this product strategy expecting multiple rate cuts - which was the case in 2025. But while rates have come down from their peak, further meaningful cuts are no longer widely expected, and forecasts are beginning to diverge.

This creates a different environment than borrowers expected.

The question is no longer:

"How much lower will rates go?"

It's now:

"Am I comfortable staying variable if rates don't fall much further?"

Why Fixed Rates Haven’t Moved the Same Way

This is where many borrowers get confused.

Bank of Canada announcements directly affect variable rates, but fixed mortgage rates are driven primarily by bond markets.

Bond yields move based on:

  • Inflation expectations

  • Economic growth

  • Government borrowing

  • Global markets

This means fixed rates can:

  • Stay steady even when the Bank cuts

  • Rise even when the Bank holds

  • Fall before the Bank cuts

Many borrowers have seen exactly that over the past year.

 

Should Variable Borrowers Lock In?

Many borrowers originally chose variable with the idea:

"I'll lock in when fixed rates fall."

But fixed rates haven't dropped as quickly as prime.

Today, variable rates often remain lower — but fixed rates offer certainty.

The decision now comes down to:

  • Cash flow flexibility

  • Risk tolerance

  • Time horizon

  • Peace of mind

And not just the rate itself.

 

The Bottom Line

Bank of Canada announcements matter — the next one is April 29’26 -  but they only tell part of the story.

If you have a variable mortgage, the key question isn't just where rates are today.

It's whether your mortgage strategy still fits your situation.

If your mortgage renews in the next few years — or you're wondering whether to stay variable or lock in — it's worth reviewing your options.

 

Let's connect!

Would you like to review your situation to help you make a decision? Ready to discuss your home ownership goals and a Better Mortgage by Dom?

  • Call/text:  416 801-6616. Email: Domenic@BetterMortgagesByDom.ca

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