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Welcome to the Better Mortgage Select monthly newsletter – July 2026 edition.

 

Brought to you by Daniel Patton, Michael Zanzini, Lorenzo Podda, and our President, Dave Butler.

One month ago, we reported that fixed mortgage rates were slowly—but finally—beginning to move in the right direction.


Canadian bond yields had been trending lower, lenders were making modest fixed rate reductions, and for the first time in several months, it appeared that additional fixed-rate relief could be on the horizon.


Unfortunately, July brought us, yet another reversal.


Oil prices rebounded sharply as the U.S.–Iran conflict returned to the forefront. One day brings renewed hope for diplomacy; the next brings another escalation. That uncertainty has placed oil firmly back into the mid $80’s-per-barrel range and reminded financial markets that this conflict remains far from predictable.

As oil moved higher, the Canadian five-year bond yield followed.


That relationship matters because while the Bank of Canada directly influences variable mortgage rates, the five-year bond yield is one of the most important indicators affecting Canadian fixed mortgage pricing.


After flirting with the 3.00% level in June—and appearing close to breaking lower—the five-year yield has climbed back to approximately 3.20%.

We Are Back in the Middle


Since the initial volatility following the beginning of the conflict settled, the five-year Canadian bond yield has established a relatively clear range:


3.00% at the lower end.
3.40% at the upper end.
Approximately 3.20% today.


In other words, we are almost directly in the middle.


A sustained move below 3.00% would create meaningful pressure for lenders to reduce fixed mortgage rates.


A sustained move above 3.40% would almost certainly produce broad fixed-rate increases across Canadian mortgage lenders.


At 3.20%, neither side currently has control.


That is why the mortgage market continues to feel like a teeter-totter. Each time the outlook begins leaning decisively in one direction, another economic or geopolitical development sends it back the other way.

Variable Rates Are Quietly Winning Again


Despite the volatility surrounding fixed rates, the variable-rate market has remained surprisingly consistent.


Approximately 63% of BM Select clients who have selected a new mortgage over the past 18 months have chosen a variable rate.


For clients who obtained a mortgage after January 1, 2025, the variable rate has generally outperformed the average three- and five-year fixed rates available over that period.


That does not erase what happened between 2022 and 2024.


During that period, variable-rate borrowers experienced one of the most aggressive Bank of Canada tightening cycles in recent history. In hindsight, borrowers who secured low fixed rates before those increases were clearly in the stronger position.


But markets change.


Today, the variable rate is once again generally the most affordable option available, and it has also become—ironically—the more stable side of the mortgage market.


That does not make variable automatically right for everyone. It simply means it deserves a serious place in the conversation.

Variable Mortgages Are Not All the Same


For borrowers considering variable, there is another important decision to make: static payment or adjustable payment?


With a static-payment variable mortgage, the regular payment typically remains unchanged when the Bank of Canada moves rates. Instead, the amount going toward principal and interest changes, which can extend or shorten the effective amortization.


With an adjustable-payment variable mortgage, the payment rises or falls following changes to the prime rate, helping keep the mortgage on its original amortization schedule.


One provides greater payment consistency.


The other provides greater amortization consistency.


Neither structure is automatically better. The right choice depends on your monthly cash flow, your risk tolerance and how much payment movement your household can comfortably absorb.

Take the Free Protection


Even when a client intends to choose a variable mortgage, we continue to recommend securing a 120-day fixed-rate hold whenever possible.


It costs nothing.


It does not obligate you to select the fixed rate.


And it protects you if oil prices climb further, bond yields break above their current range, or geopolitical events suddenly place upward pressure on mortgage pricing.


If fixed rates fall before closing, we pursue the improved rate.


If fixed rates rise, the existing rate hold provides a valuable fallback.


It is one of the few meaningful protections Canadian banks still provide without charging a fee—and in a market that can change direction within days, it should be used.

Looking Ahead


The U.S. Federal Reserve held interest rates unchanged this week, reinforcing that North American central banks remain reluctant to move while inflation, employment, trade and geopolitical risks continue pulling in different directions.


The Bank of Canada will not meet next month - instead, they'll meet on September 2nd to discuss interest rates. In the interim, we’ll get the standard inflation, employment and GDP data, but all eyes are on the Middle East where the US-Iran conflict grips economies and confidence around the world.

 

Want to speak to one of our mortgage experts about an upcoming mortgage you may need?  Need advice or some help planning?  REPLY to this email and we’ll get your inquiry attended to right away.

   
     

Sr. Mortgage Agent, Michael Zanzini, enjoyed attending the Smart Home Choice Realty Summer Social, reconnecting with Gary, Darlene, Quinton, Kathryn, Karen, and many other valued Real Estate professionals while discussing the current mortgage and housing market.

   
     

Vice President, Daniel Patton, took some time to head up north for a property tour alongside Connie Thompson of Century 21 and some clients who are exploring opportunities to purchase and renovate single-family homes. It was a great day touring properties, discussing renovation strategies, and showcasing how many of these homes are perfect candidates for the BM Select Build Up program—helping buyers finance renovations and unlock their property’s full potential. Great people, great properties, and a fantastic day on the road!

   
   
     

Then it was Michael’s turn on the road, attended The Elm Team's Client Appreciation BBQ, where he had the pleasure of catching up with Georges, Mary, Mandy, and their clients. It was a fantastic day and looking ahead to a strong finish to 2026 while continuing to grow the partnership.

   
     

We all found some time to attend our very own BM Select Summer Company outing. This year we all attended the Toronto Blue Jays ‘Work from Dome’ day on July 23rd.  It was a great time to unwind, do some team building and network with some bank reps that we work with to help provide you, our clients, with the best and widest range of mortgage products available in the market.

     

And to wrap up the month, Michael participated in the Our Neighbourhood Realty | Royal LePage Monthly Team Meeting, sharing mortgage and market updates and discussing strategies to help clients confidently navigate today's lending environment.

     

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