Spring is in the air… and so is confusion. 

While trees are budding and patios are filling up, mortgage rate predictions are bouncing around like a squirrel on espresso. Thanks (or no thanks) to Donald Trump’s ever-changing stance on tariffs—and just about everything else—economic forecasts are in constant flux. And when the U.S. sneezes, the Canadian bond market tends to catch a cold.

Amidst all the turmoil, the Big Six banks in Canada have once again updated their interest rate forecasts for the Bank of Canada (BoC).

 

Where the Big Banks Stand

Bank Last Report Q2 2025 Q3 2025 Q4 2025 Q1 2026 Q2 2026 Q3 2026 Q4 2026 Total Change
CIBC Apr 16 -0.25% -0.25% N/C N/C N/C N/C N/C -0.50%
RBC Apr -0.50% N/C N/C N/C N/C N/C +0.25% -0.25%
Scotia Apr 16 N/C N/C N/C -0.25% -0.25% -0.25% N/C -0.75%
TD Apr -0.25% -0.25% N/C N/C N/C N/C N/C -0.50%
BMO May 2 -0.25% -0.25% -0.25% N/C N/C N/C N/C -0.75%
NBC Apr -0.25% -0.25% -0.25% N/C N/C N/C N/C -0.75%

‘Last Report’ indicates when the forecast was updated. RBC, TD and National Bank (NBC) only provide the month. 

The most notable adjustment was from Scotiabank, who was previously expecting no further movement through to the end of 2026. Now, they’re calling for 0.75% in cuts in 2026—currently the only bank projecting rate reductions for next year.

Meanwhile, National Bank has scrapped its previously forecasted hikes for late 2026. That leaves RBC as the lone wolf predicting a rate increase next year—a modest 0.25% bump in Q4.

 

What About Fixed Mortgage Rates? 

Ah yes—the classic question:

“Should I wait until the next Bank of Canada announcement to lock in my rate?”

It’s understandable but can be misguided. In everyone’s mind, mortgage rates are dropping, so why not wait for the next announcement to see if rates drop? 

This can be a costly mistake. 

Fixed mortgage rates don’t move in tandem with the Bank of Canada rate. Instead, they’re influenced primarily by Government of Canada bond yields—which can swing wildly at the mere whisper of a geopolitical headline.

And nobody generates more headline whiplash than Donald J. Trump.

 “I’m going to add a 200% tariff on the wind blowing over from Canada!” 

Okay, I’m being a bit facetious, but you get the idea. The worse the trade conflict becomes, the bigger the threat to our economy and the further bond yields will drop… along with fixed mortgage rates. 

Here’s the problem: while falling rates are great for your mortgage, they would come at the expense of rising inflation, economic slowdowns, or full-blown trade wars.

Fixed mortgage rates have already hit the floor many expected. That’s not to say they can’t fall further—markets are unpredictable, and stranger things have happened. But I wouldn’t be placing any big bets on rates dropping much more from here. Of course, all eyes are still on Trump and his ongoing tariff saga. If (or when) he makes a final call, that could shift everything… again.

 

Recent Market Movement 

Just two months ago, bond yields hit a three-year low on March 4th. Since then, they have spiked up roughly 14%. Mortgage lenders responded by bumping their rates, including one that had been holding firm at 3.64% for a 5-year fixed insured mortgage… until yesterday when they raised their rate to 3.84%.

This is why it always makes sense to get the process started to lock in a rate. If the rate drops, we can still get your rate lowered for you. This can often be done right up until the week before your closing date. But if you choose to wait and rates rise, then you would have no choice but to accept the higher rate. 

 

Final Thoughts 

If you’re trying to plan based on what’s expected with mortgage rates, then it will be a risk no matter what you do. The truth is, even top economists don’t know where mortgage rates are going next. Every forecast comes with an asterisk: subject to change based on Trump’s tariff decisions. 

Timing the market is a gamble. But getting advice from a team that actually knows how to navigate it? That’s a smart move.