Understanding how government bond yields affect fixed-rate mortgage rates isn’t as complicated as it sounds. The 5-year government bond yield is the number to keep an eye on. Banks and lenders use it as a benchmark to set their lending rates – so when that yield trends up or down, mortgage rates will usually follow. 

Steady increases over a period of time usually mean banks will raise rates, while steady declines suggest rates will trend down – as institutions try to balance the book of lending and borrowing rates. Quick swings in yields don’t automatically trigger action – banks like to see trends. Banks also tend to raise rates faster than they lower them – go figure! 

Current bond yields become a reference point for mortgage rates. Competition plays a role too – each lender sets its own “spread”. Big banks often have less flexibility to lower rates, while smaller lenders may offer slightly better deals to attract business. Supply and demand, plus competition, help keep rates in check. 

Watching the 5-year bond yield won’t give you an exact calendar for when your lender will change rates. Rather, understanding yield trends gives you a valuable heads-up, especially if you’re thinking about locking in a mortgage or renewing a term.  

We watch housing markets like it’s baseball. When you’re ready to make a move, let’s put the plan in place.

The Canadian economy started 2026 on fairly steady footing. Statistics Canada reported inflation at 2.3% in January, slightly down from 2.4% in December. Because of that, most economists expect the Bank of Canada to hold interest rates steady again when it makes its next announcement on March 18th.

It’s hard not to notice there’s a lot happening globally right now – trade tensions, rising energy prices, and more than one major conflict. The effect on oil prices is reverberating, so how quickly this settles back is difficult to foresee, and almost a day-to-day discussion for now.

South of the border, trade policy has been moving around. A recent U.S. Supreme Court decision on tariffs led to the introduction of temporary new tariffs under different trade rules. Situations like this, along with energy prices that have been trending upward, are things economists are watching closely as the year moves forward. CUSMA trade conversations set for the summer are an unknown. There will be a new chairperson at the U.S. Fed, leading to a presumption of lower rates in the U.S., which would likely have a trickle-over effect to our rates here at home.

Turning to our housing markets: According to CREA, home sales across Canada are expected to rise about 5.1% in 2026, with the national average price projected to increase roughly 2.8% to around $698,000.

What’s really different right now is the shape of the market – Balancing is the operative word. The sales-to-listings ratio is about 45%, which is something we haven’t seen in several years. 

For buyers, balance brings something valuable – time & choice. You can explore options, compare homes, and make decisions with more breathing room. And that’s well received when making what is often life’s largest financial decision.

For sellers, balance is also helpful. When you sell, you want confidence that there will be good options waiting for your next move.

And while national numbers are interesting, real estate is always local. Neighbourhood trends, property types, and local demand are what really shape the opportunities around us.

Curious? Let’s connect for a detailed overview of price, velocity and choice within the micro-market of specific interest, because that is really the market of value we want to focus on. We’ll share a thoughtful and factual conversation, so that you have informed facts and stats about the market here and now.

As expected, the central bank held the rate steady at 2.25% during the first interest rate announcement of the year on January 28th. These days, economists are divided over what rate movement could look like throughout the year. Inflation is likely to continue to play a pivotal role in BoC decisions.

On January 19th, Statistics Canada reported that consumer prices in Canada rose at a faster-than-expected pace of 2.4% in December, largely due to the effect of last year's sales tax break. The silver lining is that core measures of inflation cooled for the third consecutive month.

The deceleration in core prices is likely a reason that the Bank of Canada held its key rate and indicated that this was about the right level to keep inflation close to its 2% target. Political sentiments about the Free Trade Agreement (CUSMA) in addition to “rates” are adding to a slowdown effect.

Precious metals have seen rapid growth recently – and have seen some sharp price swings. One of the current market “chatter points” is speculation around who was just nominated as the next Chair of the U.S. Federal Reserve. As that leadership question settles out, short-term volatility in gold and other precious metals may likely continue. This is a reminder that, while precious metals can act as a hedge, their prices can also react quickly to political and policy news – making timing and risk tolerance especially important.

Over the past year, interest rates have eased, opening new opportunities for homebuyers – for both upsizing and downsizing.

Thinking about making a move this spring? Let’s connect to explore options.