Mortgage Market Update: Stay the Course and Focus on Your Own Strategy

If you’ve been following the headlines lately, there is a lot happening.

Interest rates. Inflation. Bond yields. Oil prices. Government spending. Global investment. The U.S. Federal Reserve. The Bank of Canada.

It can feel like every new headline should change what you’re doing with your mortgage.

My advice? Stay the course.

That doesn’t mean ignoring what’s happening in the economy. It means understanding that your mortgage decisions should be based first and foremost on your personal goals, your cash flow and what you expect your life to look like over the next three to five years.

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What’s Happening With Rates?

One of the biggest things I’m watching right now is what is happening in the U.S.

Decisions made by the U.S. Federal Reserve can influence bond markets on both sides of the border. Canadian bond yields are particularly important for us because they influence the pricing of fixed mortgage rates in Canada.

At the same time, markets are dealing with concerns around inflation, energy costs, government debt and global economic uncertainty.

That means we could continue to see movement in bond yields—and therefore fixed mortgage rates—even when the Bank of Canada isn’t changing its overnight rate.

This is an important distinction for mortgage borrowers.

Variable rates are primarily influenced by the Bank of Canada’s overnight rate.

Fixed mortgage rates are much more closely connected to the bond market.

So when you hear that the Bank of Canada or the Federal Reserve is meeting, it doesn’t automatically mean your mortgage rate is about to move in the same direction.

There are a lot of moving pieces.

Inflation Is Still Part of the Story

Inflation remains one of the biggest factors central banks are watching.

But even inflation numbers require some context.

Economic data gets revised. The way governments measure certain components of inflation can change. New information comes in. Energy prices can move quickly. Employment numbers can surprise us.

This is why I don’t recommend building your entire mortgage strategy around trying to predict what the Bank of Canada, the Federal Reserve or the bond market will do next.

Even the people making these decisions don't know exactly what the economy will look like six or twelve months from now.

Instead, we can build a mortgage strategy around something we know a lot more about:

you.

The Question Isn't Just "Where Are Rates Going?"

When clients call me, one of the first questions is often:

"Emily, what do you think rates are going to do?"

Of course, we talk about rates. But I think there are much more important questions we should be asking.

What do you think your life will look like over the next three to five years?

Are you planning to stay in your current home?

Could you sell?

Are you thinking about upsizing or downsizing?

Could a job change or relocation be possible?

Will you need access to additional funds for renovations, investments or another property?

How comfortable is your monthly cash flow? THIS ONE IS HUGE for almost all households right now.

Could you handle a higher payment if your circumstances changed?

Are you trying to aggressively pay down your mortgage, or is maintaining flexibility more important?

Those answers can be much more valuable than trying to perfectly predict the next interest-rate announcement.

Your Mortgage Should Have a Strategy Behind It

A mortgage isn't simply about finding the lowest advertised rate.

The right mortgage should support what you are trying to accomplish financially.

Sometimes that means choosing a fixed rate for payment certainty.

Sometimes a variable rate makes sense.

Sometimes a shorter term provides valuable flexibility.

And sometimes paying a slightly different rate can make sense if the mortgage offers better prepayment privileges, portability, refinancing options or penalties.

This is why I want my clients thinking beyond the rate and looking at the next three to five years as a whole.

Your mortgage should work with that plan—not against it.

Canada's Economy Is Looking for Growth

Another development I’m watching is Canada's push to attract more global investment into infrastructure, energy, mining and major projects.

For homeowners and buyers in Ontario and BC, this might seem disconnected from your mortgage, but the bigger economic picture matters.

Investment can support employment, construction, housing demand and economic growth. The important question will be whether proposed investments turn into actual projects and jobs.

As always, announcements are one thing. Execution is another.

I’ll continue watching these developments because they help provide context for where our economy—and eventually borrowing costs—could be headed.

So, What Should You Do Right Now?

My plan for clients remains the same: stay the course and make decisions based on your own financial picture rather than reacting to every headline.

If you're buying, understand your real affordability before you start shopping.

If your mortgage is renewing, start the conversation early. Don't wait until your renewal letter arrives and assume your current lender's offer is your best option.

If you're considering selling, refinancing or accessing equity in the next few years, make sure the mortgage you choose today gives you the flexibility you may need tomorrow.

And keep an eye on cash flow. Being approved for a certain mortgage amount and being comfortable carrying that mortgage are two very different things.

Most importantly, don't sign the first mortgage offer you receive from your bank without getting a second opinion.

Your bank's offer is one option. It isn't automatically the best option for your circumstances.

A mortgage professional can help you compare the rate, term, penalties, features and flexibility—and then look at how those pieces fit into your bigger financial plan.

Stay the Course

There will always be another Bank of Canada announcement, inflation report, bond-market move or economic headline.

We can't control those things.

What we can control is having a strategy.

Know your numbers. Understand your cash flow. Think about where you expect to be in three to five years. Give yourself flexibility where it makes sense. And start conversations about your mortgage well before you actually need to make a decision.

The goal isn't to perfectly time the mortgage market. The goal is to make sure your mortgage continues to work for you as your life changes.

Ready to chat about your goals? Visit www.emilycallme.com

Emily Miszk

Mortgage Broker BRX Mortgage FSRA #13463