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Better Mortgage Select Presents: Breaking Interest Rate News - Brought to you by Daniel Patton, Michael Zanzini, Lorenzo Podda, and our President, Dave Butler.
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As expected, the Bank of Canada announced this morning that it is leaving its policy rate unchanged.
While the announcement itself isn't surprising, the reason behind it is worth paying attention to because it tells us a lot about where the Canadian economy sits today — and where mortgage rates may be headed next.
The Bank of Canada currently finds itself in a difficult position.
On one hand, Canada's economy continues to struggle. Recent GDP numbers were disappointing, unemployment remains elevated at 6.6%, and Canada now finds itself among the weakest-performing economies in the G20.
Under normal circumstances, those conditions would support lower interest rates.
On the other hand, inflation is moving in the opposite direction.
As the U.S. - Iran conflict continues to impact global energy markets, oil prices remain elevated and inflation pressures continue to build. Economists are now forecasting that headline inflation could move toward 3.5% later this year if current conditions persist.
Under normal circumstances, that would argue for higher interest rates.
And that's exactly why the Bank of Canada is doing nothing. For now.
They are effectively sitting on the sidelines, waiting for more clarity before making their next move.
| | What This Means for Mortgage Rates
| | - Variable Rates: Today's announcement reinforces what we have been discussing with clients for several months now — the Variable Rate has become the most stable mortgage product in Canada. While inflation remains elevated, weak economic growth makes it difficult for the Bank of Canada to justify raising rates. At the same time, inflation makes it difficult for them to cut rates. The result is a likely holding pattern.
- Fixed Rates: Fixed mortgage rates remain the more volatile side of the equation. They continue to be heavily influenced by bond yields, which in turn are reacting to inflation expectations, oil prices, and global geopolitical events. While we have seen some lenders remain competitive, fixed rates continue to face upward pressure whenever bond yields move higher.
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What Should You Be Doing Right Now?
If your mortgage is renewing in 2026 or early 2027:
Now is the time to start planning. Even if your renewal is months away, securing a rate hold can provide valuable protection if fixed rates rise further during the summer.
If you're shopping for a home:
Continue getting pre-approved and securing 120-day rate holds. There is no cost to do so, and it protects your purchasing power while you search.
If you're currently in a variable rate mortgage:
Our overall strategy remains unchanged.
The reason most borrowers chose a variable rate over the last 18–24 months was to take advantage of a lower rate today while maintaining the flexibility to lock into a fixed rate later when opportunities arise.
That strategy remains intact.
The ultimate goal has always been to lock into an attractive long-term fixed rate when the timing is right. While geopolitical events have delayed that opportunity, nothing has fundamentally changed about the game plan.
| | Looking Ahead
The next Bank of Canada meeting arrives quickly on July 15th — just five weeks from today.
Between now and then, the biggest story may not be inflation, employment, or GDP.
It may be trade.
On July 1st, Canada, the United States, and Mexico begin the scheduled review of the CUSMA trade agreement. Markets currently expect the agreement to remain in place with some modifications, but any unexpected developments could have significant implications for the Canadian economy and, ultimately, future interest rate decisions.
For now, the Bank of Canada remains in wait-and-see mode.
And so do we.
As always, our focus remains on helping clients make smart decisions based on their individual situation — not reacting emotionally to headlines.
If you'd like to review your mortgage strategy, discuss an upcoming renewal, or simply get a second opinion on your options, reply to this email and one of our mortgage experts would be happy to connect.
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That's right.
Now that we've reached the halfway point of 2026, we felt it was the perfect time to open our mortgage experts' calendars for complimentary 30-minute Debt Review Meetings for our clients.
The reality is that many Canadians are feeling financial pressure.
Over the last few years, mortgage payments have increased, the cost of everyday living has risen, and for many households, balances on credit cards, unsecured lines of credit, vehicle loans, and personal loans have quietly crept higher.
The good news?
The best time to address rising debt is before it becomes a serious problem.
One thing we've learned from the debt review meetings we've already completed this month, is that many clients have more options than they realize.
In many cases, we're helping homeowners reduce their overall monthly obligations by consolidating higher-interest debt into lower-interest financing. By restructuring debt more efficiently, clients are often able to improve monthly cash flow, simplify their finances, and put themselves back in control of their budget.
We've seen situations where clients save hundreds of dollars per month simply by reorganizing debt they were already carrying.
| | The key is not waiting.
The earlier you address rising debt, the more options you typically have available.
Waiting until debt has significantly impacted your cash flow or credit profile can limit those options and make solutions more difficult.
And even if we determine that debt consolidation isn't the right solution for you, you'll still leave the meeting with a clearer picture of your current financial position, a better understanding of your options, and a practical game plan moving forward.
Whether you're carrying credit card balances, personal loans, unsecured lines of credit, vehicle financing, or simply want a second opinion on your overall financial picture, we're happy to sit down with you and explore the possibilities.
Reply to this email with the subject line: DEBT REVIEW - and one of our mortgage experts will reach out to schedule your complimentary 30-minute consultation.
Sometimes a simple conversation can uncover opportunities that make a meaningful difference to your monthly cash flow and long-term financial health.
| | As always — we’ll continue to keep you one step ahead as the data and global landscape evolve.
| | | | Just a friendly reminder to come visit us on our socials, where we put out a ton of videos with tips and information to help you navigate the wild world of mortgages! Check out the links below and give us a follow! | | | | | | | | | | | | As always, if you have any questions or want to do some mortgage planning, feel free to reach out to us at: info@bmselect.ca | | | | | | | |
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