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The Henry Mortgage Team Blog

Mortgage Rates, the Federal Budget & What It Means for You

November 6, 2026

It's been an interesting week in the financial markets, with the U.S. midterm elections and the release of Canada's federal budget giving investors and borrowers plenty to digest.

Let's start with some encouraging news on mortgage rates.

The Government of Canada's 5-year bond yield, which has a significant influence on fixed mortgage rates, has dropped from approximately 3.50% at the beginning of the week to around 3.36% as of Friday morning.

That brings bond yields closer to where they were in September, although we're still above the roughly 3.00% levels we saw back in July.

We haven't seen lenders lower their fixed rates in response, but the recent decline in bond yields has at least taken some of the upward pressure off fixed mortgage rates for now. That's welcome news, particularly for anyone approaching a mortgage renewal or considering a purchase.

Of course, inflation remains a concern, and we're not out of the woods just yet. We'll be watching the next Bank of Canada rate announcement on December 9th to see what direction monetary policy takes next.

Some interesting mortgage (and mortgage related) changes in the federal budget

The federal government announced some proposed changes that could provide additional flexibility for home buyers and real estate investors. Here are the main points that we found most interesting:

  • More options for first-time buyers and new construction: Proposed changes would allow 30-year amortizations and increase the eligible home price limit from $1 million to $1.5 million for certain insured mortgage programs (low ratio insured) provided at least one borrower is a first-time buyer or the property is a new build. Of course this already applies to high ratio insured (when a borrower is doing less than 20% down), however low ratio insured is when someone has 20% down or more. This could make mortgage rates better in some cases when buyers have 20% down or more, without the need to pay an insurance premium.
  • New opportunities for rental properties: Starting February 1, 2027, a new mortgage insurance program is expected for 3 and 4unit properties. It would allow financing of up to 90% of the property's value, 30-year amortizations, and no requirement for the owner to live in the building. It seems that this may only be available for newly built 3 and 4 unit residential properties. (Details)
  • Foreign Freeze Continues: The government proposes to introduce legislation to extend the application of the Prohibition on the Purchase of Residential Property by Non-Canadians Act to January 1, 2029. It plans to exempt new residential properties, however, to attract additional investment in new housing supply.
  • Immigration Autopilot Engaged: Carney's government left the annual permanent resident target for 2027-2029 at 380,000 (source), giving no boost to the economy or real estate demand. They did add a new time-limited measure to help "up to 200,000 people already living in Canada" become permanent residents.

These changes could open some interesting doors, especially for buyers looking at newly built homes or investors considering smaller multi-unit properties. As always, the details and lender requirements will matter once available. When the government makes announcements like these, there is typically further clarification needed.

What does all this mean for you?

Whether your mortgage is coming up for renewal, you're considering refinancing, or you're thinking about buying an investment property, this is a good time to review your options. Sometimes a small change in the market can create an opportunity worth exploring.

As always, if you have questions about your mortgage or would like to discuss your options, please don't hesitate to reach out. We're always happy to help!

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