Mortgage borrowers in Canada can expect steadier variable rates and mixed renewal impacts in 2026

The Bank of Canada held its key rate at 2.25% in late 2025, and Ratehub.ca reports five-year variable rates (about 3.45%) are currently below five-year fixed rates (about 3.94%).

Ratehub.ca mortgage expert Penelope Graham outlines expectations for mortgages and the housing market in Canada for 2026. The Bank of Canada ended 2025 with a rate hold and a key policy rate of 2.25 per cent. Graham says variable rates should remain broadly stable this year while fixed rates face more volatility. She also notes housing market conditions and borrower experiences from the prior year. What's reported: - The Bank of Canada held its key interest rate at 2.25 per cent in its final 2025 announcement and signalled a rate-hold stance into 2026. - Ratehub.ca cites the lowest five-year variable renewal rate at about 3.45% versus a lowest five-year fixed renewal rate near 3.94%, a spread of about 49 basis points. - An example from Ratehub.ca shows a fixed-rate renewal raising monthly payments from $2,224 to $2,800 for a typical scenario, an increase reported as $576 per month (about 26%). - A comparable variable-rate example shows a move from $2,121 initially to $2,797 on renewal, reported as a $107 per month increase (about 4%) versus the homeowner's current payment at the end of the term. - Ratehub.ca recorded a 25.7% year-over-year increase in questions about variable-rate mortgages in 2025, up from a 7% increase in 2024. - The article reports that inventory built up in many large Canadian markets in 2025, tilting conditions toward buyers while overall prices remained above incomes in major centres. Summary: Variable mortgage rates are described as likely to be stable in 2026, while fixed rates may remain more volatile and lead to higher renewal payments for some borrowers. The Bank of Canada’s rate-hold was emphasized, and the article notes the central bank expects inflation near 2% in 2026 and mentioned a possible opening for a rate increase in early 2027; the timing of any future move is undetermined at this time.