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Welcome to the Better Mortgage Select monthly newsletter – June 2026 edition. Brought to you by Daniel Patton, Michael Zanzini, Lorenzo Podda, and our President, Dave Butler.
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Are We Finally Starting to Turn the Corner?
If there has been one word that has defined the first half of 2026 for Canadian real estate, it has been patience.
Patience from home buyers waiting for affordability to improve.
Patience from homeowners hoping interest rates would finally settle.
Patience from real estate investors waiting for opportunities to reappear.
And patience from all of us as we've navigated an economy that has been anything but predictable.
Throughout the first six months of the year, we've done our best to keep you informed—not simply by reporting what the Bank of Canada has done, but by explaining why it has happened and, more importantly, what we believe it means for you.
As we head into Canada Day and begin the second half of 2026, we're pleased to say there are finally several encouraging developments beginning to emerge. | |
Bond Yields Are Quietly Moving Lower If you've followed our newsletters this year, you'll know we've spent considerable time discussing the importance of the Canadian 5-year bond yield.
Why?
Because while the Bank of Canada controls variable-rate mortgages, fixed mortgage rates are driven primarily by bond yields. And the price of oil has a big impact on bond yields.
The month of June brought a sharp reduction in oil prices, confirming that the US-Iran conflict is de-escalating, for now.
(Oil pricing chart from September 2025 to present):
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Oil is now back trading at the same price that it was on Monday, March 2nd, the first trading day following the start of the US-Iran conflict – and down over 37% from its highs.
This has caused bond yields to begin to retreat as well.
In fact, today's five-year bond yield has retraced back to mid-March levels, erasing the pressure that was on banks to increase fixed rates.
(Canadian 5-year bond yield chart from September 2025 - present):
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***Once bond yields are trading in the yellow area, expect to see all banks lowering their fixed rates.***
This doesn't mean fixed rates are about to fall dramatically overnight, but some banks have started to test the waters. Scotia Bank just introduced a 60-day quick close special for CMHC insured mortgages, offering a 3-year fixed rate at 3.99%.
Variable rates are also starting to drop - banks can offer bigger discounts to the prime rate as risk premiums fall.
This is all very encouraging.
And if bond yields continue to drop from here, we could see a late summer interest rate pricing war heat up amongst the banks.
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Finally Seeing Signs of Life
Perhaps even more encouraging than the bond market is what we're beginning to see in our live data.
After an extremely slow spring real estate market, purchase activity has finally started to improve.
We're seeing homes getting priced less aggressively.
We're completing more pre-approvals for buyers.
We're seeing more purchase agreements from our realtor partners.
No, we're not back to a consistent active market like Canadians became accustomed to from 2005 to 2020.
But for the first time in several months, the trend appears to be moving in the right direction.
Sometimes the most important part of a recovery isn't explosive growth.
It's simply seeing the decline stop.
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What We Expect for Interest Rates
Our outlook remains largely unchanged.
We continue to believe the Bank of Canada will likely remain in a holding pattern through the near term as it monitors inflation and global events.
The recent rise in headline inflation has largely been driven by higher energy prices rather than broad-based inflation throughout the economy.
With oil prices now beginning to retreat, we'll be watching closely to see whether inflation follows over the coming months.
If it does, we still believe the next move by the Bank of Canada is more likely to be down than up.
Not because the economy is booming.
Quite the opposite.
Canada continues to face sluggish economic growth, softer consumer spending, and an employment picture that remains weaker than headline numbers alone would suggest.
Our view remains that additional economic stimulus will eventually be required.
When that happens, we believe both variable and fixed mortgage rates could benefit.
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What This Means for You
Regardless of whether you're buying, renewing, refinancing, or investing, our advice remains remarkably consistent.
Have a plan.
If you're purchasing this year, obtain a rate hold before shopping.
If you're renewing, review your options well before maturity.
If you're carrying higher-interest debt, don't assume today's payment structure is your best one.
And if you're a real estate investor, continue looking for opportunities to improve cash flow rather than simply waiting for the market to change.
Markets eventually recover.
The clients who benefit the most are almost always the ones who prepared before everyone else realized conditions had improved.
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Looking Ahead
The second half of 2026 will likely be determined by a handful of key factors.
We'll be watching:
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- The Bank of Canada's July 15 interest rate announcement.
- Inflation data to determine whether lower oil prices begin feeding through into headline inflation.
- Employment numbers to gauge the health of Canada's economy.
- Bond yields, which continue to be the biggest driver of fixed mortgage pricing.
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We'll continue monitoring each of these closely and, as always, we'll keep you informed every step of the way.
While we're certainly not declaring victory just yet, we can say this:
For the first time in several months, we're seeing more reasons for cautious optimism than reasons for concern.
After the first half of 2026, that's a welcome change.
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If you'd like to discuss your mortgage, renewal strategy, refinance options, or simply want a second opinion on your current financing, reply to this email with "LET'S CHAT" and one of our mortgage experts will personally reach out to arrange a time that works for you.
Sometimes a 20-minute conversation is all it takes to uncover an opportunity that could save thousands over the coming years.
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Our very own Vice President, Daniel Patton, was a guest speaker at the Keyspire Investor Summit in Niagara Falls. He showcased our exclusive BM Select Build-Up program and how it is changing the game for residential real estate investors. Overall, it was a fantastic weekend full of education and collaboration.
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From there, Michael was back on the road, taking part in one of his favorite ways to interact with our clients and realtor partners; by helping to lead a Smart Home Choice property tour. These tours showcase the ideal homes and strategies that investors are having incredible results with, and you get to see them with your own eyes.
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Then it was back on the networking circuit for Daniel, as he had the opportunity to present to a packed room of homebuyers, investors, and real estate professionals at a Saturday morning event in Bowmanville, hosted by Hōm Drafting and Design Inc. and Celfield Homes. Over coffee and breakfast, attendees learned about today’s market, financing strategies, and opportunities for buyers from the pros, like Dan and Clinton Edwards from Hōm Drafting.
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Michael kept hustling, finding some unique opportunities for our clients on the development side as he enjoyed a breakfast with developer Paul Prochilo of Urbin Co. Developments. Keep an eye out for some interesting collaborations in the future that could make adding units to your home seamless and without capital outlay.
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Finally rounding out the month, Daniel was asked to speak on a webinar hosted by his good friend Gary Hibbert, founder of Smart Home Choice. During the session, Dan shared his insights on today’s mortgage market, financing strategies, and opportunities for real estate investors, helping attendees better understand how to navigate the current market with confidence.
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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! | |
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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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