By Bonnie Thorlakson, Mortgage Specialist — Kelowna, BC

Summary

  • Fixed mortgage rates are dropping.
  • The Bank of Canada is likely holding interest rates steady.
  • Housing market activity is slowing down.
  • Buyers are waiting for more economic stability.

How Tariffs Are Changing the Economy

Short answer: Global tariff changes have created economic uncertainty that is rippling through financial markets — including the Canadian mortgage market.

Recent changes to tariffs between countries have caused uncertainty. Even though Canada has not been the main target, some tariffs on goods remain. This has put extra pressure on the global economy. Stock markets reacted by falling. Investors became cautious, leading to changes in how money moves around the world.

What Falling Bond Yields Mean for Mortgages

Short answer: When bond yields fall, fixed mortgage rates typically follow — meaning borrowers may find better rates right now than in recent months.

One major effect has been falling bond yields. In Canada, bond yields are used to help set fixed mortgage rates. When bond yields drop, fixed mortgage rates often become cheaper. That is happening now. Many lenders have lowered their rates for both insured and uninsured mortgages. People who are renewing, refinancing, or buying a home are seeing better borrowing costs than they have in recent months.

The Bank of Canada's Approach

Short answer: The Bank of Canada is taking a cautious, wait-and-see approach rather than making large rate moves based on short-term uncertainty.

The Bank of Canada is watching the economy closely. They have made it clear they will not make big changes to their Overnight Lending Rate unless they have to. For now, the plan is to keep rates steady and react only if conditions get worse. They are taking a cautious, short-term view rather than making long-term predictions.

Housing Market Slowdown

Short answer: The spring market that was expected to be strong has softened — buyers are pausing, and sellers are adjusting pricing in many areas.

Before tariffs became a major concern, the spring real estate market was expected to be strong. Lower rates and high demand were pushing forecasts higher for both sales and prices. Now that uncertainty has entered the picture, many buyers are hitting pause.

Recent data shows that home sales are slowing. Some areas have seen the largest drop in sales activity in several years. Price growth has softened too, especially in regions that had seen strong gains.

Buyers are not rushing into the market. Many are waiting for signs that the economy is more stable before making big decisions. Sellers are adjusting to slower demand, sometimes lowering prices to stay competitive.

What Borrowers Should Keep in Mind

Short answer: The current environment creates real opportunities — lower rates mean more affordable borrowing — but markets can shift quickly, so staying informed matters.

The current environment creates opportunities. Lower mortgage rates mean that borrowing is more affordable. For anyone up for renewal or refinancing, or purchasing a home, this is a good time to review your options.

However, markets can change quickly. It is important to stay informed and work with a mortgage specialist to find the best strategy for your needs.

From Bonnie

With market conditions changing, it's important to understand how these shifts may affect your mortgage. If you're renewing, refinancing, or exploring new options, please request a call back and I can help you navigate the process and find what fits your needs.