The Henry Mortgage Team Blog
Mortgage Rates Are Rising Quickly, and What It Means for You
March 21, 2026
Over the past two weeks, many fixed mortgage rates have increased by roughly 0.20% to 0.40%. As an example, a lender offering 3.99% not long ago may now be closer to 4.19% to 4.39% give or take. That is a difference of roughly $21 per month more, for every $100,000 of mortgage amount, based on a 25 year amortization. The primary reason for this shift is a meaningful increase in bond yields, which directly influence fixed mortgage rates.
To simplify what’s happening: rising oil prices largely driven by ongoing conflict in and around Iran are putting upward pressure on fuel costs, and in turn, the price of most goods and services. If this persists, it leads to higher expected inflation. When inflation expectations rise, bond investors demand higher returns, which pushes bond yields higher and ultimately, mortgage rates follow.
A quick refresher: a bond is essentially a loan to a government or corporation in exchange for regular interest payments and the return of your principal later. If investors expect inflation to erode their future purchasing power, they will only lend money if they receive a higher rate of return hence, rising bond yields.
Looking ahead, the longer geopolitical tensions persist, the more pressure we may continue to see on inflation, bond yields, and ultimately mortgage rates. While a rate like 4.29% to 4.79% may not feel ideal compared to 3.99% (or lower) last month, it can feel very different if rates move toward 5.50% or more. We see this psychology often when rate increases happen. Rates only feel “good” in hindsight.
The takeaway is simple: if a refinance, renewal, or purchase is on your radar, it may be wise to secure a rate hold sooner rather than later to protect against further increases. If you already have a rate hold, know the expiry date of that rate hold. If you are buying, switching to another lender, or refinancing, the closing date must be on or BEFORE the rate hole expiry date in order to keep that rate.
Shifting gears to variable rates. The next Bank of Canada announcements are scheduled for April 29th, June 10th, and July 15th. Market expectations have shifted, with some forecasting up to two rate increases by year-end. This is a significant shift in market expectations, but market expectations are not guaranteed. As oil and gas prices increase, the likelihood of Bank of Canada rate hikes also increase as they try to keep inflation down.
It may seem counterintuitive, but by increasing interest rates, the Bank of Canada aims to reduce overall spending, helping to prevent prices from rising even faster. While this environment can feel uncertain, it’s important to remember that markets move in cycles and opportunities always arise within them.
As always, if you have any questions or would like to explore your mortgage options, we’re here to help.
Sincerely,
Kurt Henry, AMP, Mortgage Broker
License #M08000655