The question I keep getting right now — from first-timers, from people renewing, from clients who’ve been sitting on the fence for months — is some version of this: should I lock in or stay variable?
Key Takeaways
- Variable rates are currently 50+ basis points below fixed — real savings from day one
- You can switch from variable to fixed at any time without penalty
- Over 60% of Canadian mortgages renew in 2026 — the Bank of Canada is watching closely
- The right answer depends on your cash flow, risk tolerance, and timeline — not headlines
I get it. Rates have moved a lot. The Bank of Canada has been cutting. The news cycle is noisy. And if you’re up for renewal this year, you’re probably staring at a payment that looks very different from what you signed up for.
Here’s my honest take — the one I’m actually giving clients, not a hedged non-answer.
Where Things Stand Right Now
As of early 2026, the Bank of Canada’s policy rate sits at 2.25%. Variable rate mortgages are currently running roughly 50 basis points or more below comparable fixed rates — that’s real savings from day one.
Fixed rates, on the other hand, are priced off Government of Canada bond yields, and bond markets have been jumpy. Just last week, escalating tensions in the Middle East — including the Iran situation — caused bond yields to spike. When yields go up, fixed mortgage rates follow, sometimes within days. That volatility is baked into the fixed rate you’d be locking in today.
So you’re not just choosing between two numbers. You’re choosing between two very different relationships with the market.
The Case for Variable — And It’s a Strong One
Variable rates have been outperforming fixed over the long run in Canada for decades. That’s not a prediction — it’s historical data. And right now, with the Bank of Canada signalling a continued easing posture, there’s a reasonable argument that variable rates have more room to fall than rise in the near term.
Here’s the piece most people don’t realize: if you’re in a variable rate mortgage and rates drop further, you benefit automatically. And if something changes — if you decide you want the certainty of a fixed rate — you can convert to fixed at any time without penalty. That optionality has real value that doesn’t show up in a rate comparison chart.
That said, variable isn’t a set-it-and-forget-it product. I tell my variable-rate clients: you need to be engaged. Watch what the Bank of Canada is doing. Read the signals. When the rate environment shifts, we talk — and we move if we need to. If you’re not comfortable with that level of involvement, or if the idea of a payment that could change keeps you up at night, that matters too.
The Case for Fixed — When It Makes Sense
Fixed isn’t wrong. For some clients, it’s exactly right.
If you’re tight on cash flow and a rate increase would genuinely create hardship, the certainty of a fixed rate has real value. Same if you’re the kind of person who’d spend the next five years anxious every time the Bank of Canada makes an announcement. Peace of mind isn’t nothing — it affects your decisions, your relationships, and your quality of life.
The caution I’d offer: don’t lock in out of fear based on last week’s headlines. Bond markets react to news fast, and that reaction is often priced into fixed rates before most people have time to act on it. If you’re chasing certainty because something in the news spooked you, you may be locking in at the worst possible moment.
The Renewal Wave Nobody’s Talking About Enough
Here’s the context that I think matters more than any single rate decision right now: over 60% of Canadian mortgages are up for renewal in 2026. We’re talking about more than a million households — most of whom locked in at rates around 2% back in 2021 — now facing today’s rates in the 3–4% range.
The Bank of Canada knows this. They’ve been watching it closely, and the renewal wave is one of the reasons they’ve been cutting — they don’t want to trigger a wave of financial stress across the country. That context matters when you’re thinking about where rates go from here.
If you’re one of those million-plus households, this isn’t just an abstract rate decision. It’s a real number on a real payment, and you deserve to understand your options before you just click “accept” on whatever your lender sends you at renewal.
So What Am I Actually Telling Clients?
Most clients I’m talking to right now? I’m leaning them toward variable — with the explicit understanding that we monitor it together and we’re ready to lock in if the rate picture changes materially.
But I’m not giving the same advice to everyone. A first-time buyer stretched to the limit of their budget gets a different conversation than an investor with multiple properties and strong cash flow. A client who checks rate news daily gets a different conversation than someone who just wants their mortgage to be boring.
That’s actually why I think the generic “lock in vs. variable” debate misses the point. The right answer depends on your situation — your income stability, your risk tolerance, your timeline, your other financial commitments. The rate is one input, not the whole picture.
If you want to talk through what the right move looks like for your situation, that’s exactly what I’m here for. Reach out — let’s look at your numbers together.
Ready to run the numbers on your situation?
Every mortgage decision is different. Let’s look at yours together — no obligation, just straight talk.
