Will Mortgage Rates Go Up in 2027? What Forecasters Say

Short answer: maybe, but not necessarily soon, and forecasters don't agree on how far. The Bank of Canada's policy rate is 2.25% and has been unchanged all year ^[1]. CMHC chief economist Mathieu Laberge said this weekend that he doesn't see rates going up "anytime soon," and that hikes may return in 2027 ^[6]. Financial markets are pricing in more than that over the next 12 months ^[8]. If you're wondering will mortgage rates go up in Canada, the more useful question is what you can do now so either outcome works for your budget.

This guide puts the forecasts side by side and covers fixed vs variable, when to lock in, and how to time a renewal.

Where Canadian mortgage rates stand today

Two things stand out. Headline inflation is above the Bank's 2% target, mostly because of gasoline prices tied to global oil markets ^[4]. But the Bank's preferred core measures are just under 2% ^[5]. That mix is why forecasters disagree.

What forecasters say about 2026 and 2027

Laberge's reasoning is worth knowing. He said much of today's inflation comes from oil prices and supply-chain disruptions that interest rates can do little about, and that a soft job market argues for caution ^[6][7]. Others focus on the possibility that inflation stays above target. Both views are reasonable, which is why we don't build advice around any single forecast, including our own.

For the details on the next decision and what could move it, see our guide to a possible Bank of Canada rate hike in 2026.

Why fixed rates can rise before the Bank of Canada moves

Fixed mortgage rates are priced mainly off Government of Canada bond yields, which move daily with market expectations. Variable rates follow prime, which changes only when the Bank changes its policy rate. The 5-year yield has climbed from an average of about 3.06% in June to 3.54% on October 16 ^[3], so many lenders have already raised fixed rates even though the Bank hasn't moved.

That works both ways. If markets come around to CMHC's calmer view, bond yields could ease, and fixed rates often follow.

Compare fixed and variable for your situation. See today's best rates across 65+ lenders, OAC. Compare today's rates

Fixed or variable in 2026?

Pick the option your budget can live with in more than one scenario. The forecast matters less than you might think.

Illustration (OAC, not an offer): a $400,000 balance with 20 years left, using monthly payments.

• Consider fixed if a $200-plus increase would stretch your budget, or you value knowing your payment for the full term. A fixed rate already reflects market expectations, so you're paying for certainty up front.

• Consider variable if you have room in your budget, may move or refinance within a few years, or think rates are more likely to settle than climb. Variable penalties are often three months' interest, compared with a possible interest rate differential on fixed mortgages ^[12].

• Consider a shorter fixed term (2 or 3 years) if you want stability now and flexibility to reprice sooner. Pricing varies by lender, so compare.

If you already have a variable rate, most lenders let you convert to a fixed rate during the term without a penalty. You'll get the lender's offered rate, so ask what it is first.

When should you lock in a mortgage rate?

If you're buying or renewing in the next four months or so, a rate hold is the simplest protection. Lenders can hold a rate for 60 to 130 days, depending on the lender ^[9]. FCAC suggests asking whether you'll automatically get a lower rate if rates drop during the hold ^[9]. Policies differ, so get the answer in writing.

A rate hold costs you nothing if rates fall and the lender reprices, and it protects you if they rise. That's why we suggest it regardless of which forecast you believe.

Renewal timing: start early, decide calmly

• Know your window. Many lenders let you renew without a penalty a few months before your term ends. For example, TD allows it from 120 days before maturity ^[13] and BMO from 180 days ^[14]. Check your own lender's policy.

• Watch for the renewal statement. Federally regulated lenders must send it at least 21 days before your term ends, and you may be able to negotiate below the offered rate ^[10]. Don't wait for it to start shopping.

• Switching can be simpler than you think. If you move an uninsured mortgage to another federally regulated lender without increasing the amount or amortization, OSFI doesn't expect lenders to apply the stress test ^[11].

What you can control, whatever rates do

1. Your payment cushion. Run your budget at today's rate and at one point higher. If both work, you have real choice between fixed and variable.

2. Your timing. A rate hold plus an early start gives you options instead of deadlines.

3. Your lender. Comparing renewal offers costs little, and even a small rate difference adds up over a term.

4. Your prepayments. Using your annual prepayment privileges lowers the balance that any future rate applies to.

From our desk: Most clients who feel unsure about rates are really unsure about their plan. Once they see their payment at two or three rates and have a hold in place, the forecast becomes far less important.

Rates could rise in 2027, or they could settle, and well-informed forecasters disagree. What you can control is your plan: hold a rate if you're within a few months of buying or renewing, test your budget at more than one rate, and compare lenders before you sign.

See your numbers. Compare payments at different rates with our mortgage payment calculator, or check your renewal with the mortgage renewal calculator.

This article is for general information only and isn't financial, legal or tax advice. Rates, products and terms change without notice and are available on approved credit (OAC). The rate and terms you qualify for depend on your individual financial situation, including credit, income, property and loan-to-value. "Best rates" means the most suitable options available for your situation, not a guarantee of the lowest rate. Example rates and payments are for illustration only, as of October 2026, and are not an offer. 8Twelve Mortgage arranges mortgages through 65+ lenders and does not lend directly. Licensed across Canada — see our licences.

Rate data is from the Bank of Canada as of October 16, 2026 (policy rate and bond yield) and October 14, 2026 (prime), and inflation data from Statistics Canada (released October 19, 2026). Forecasts are third-party views, not 8Twelve predictions. Lender renewal windows are examples and can change; check your own mortgage terms.