Inflation Is Cooling. So Why Are Fixed Mortgage Rates Still Going Up?
Inflation May Have Peaked — But Fixed Rates Are Still Rising. Here's What to Do.
Inflation Spiked. The BoC Will Hold. But Rates Could Still Climb.
Canada's inflation rate hit 3.2% in May, up from 2.8% in April — the highest reading since September 2023. But before drawing conclusions, here's the important context: almost all of that jump came from gas prices, which surged more than 33% after conflict near Iran cut off a key oil shipping route. Strip that out, and the Bank of Canada's core inflation measures are still sitting right around its 2% target.
Most major banks and forecasters expect May to be the high point for inflation, with prices cooling from here. They also expect the Bank of Canada to look past the oil spike and keep its policy rate on hold through the rest of 2026.
But here's the part that matters for your mortgage: Even with calmer inflation, cheaper oil, and the Iran situation easing, government bond yields still went up. The pressure isn't coming from Canada — it's coming from the U.S. The Federal Reserve has turned more hawkish, and markets are now pricing in a possible American rate hike before year-end. When U.S. rates move, Canadian bond yields tend to follow, and bond yields are what drive fixed mortgage rates here at home.
Source: MortgageLogic.news / Rob McLister, June 22, 2026
What This Means for You
- If you're locking in a new mortgage: Rather than committing to a long 5-year term and hoping rates fall, a shorter 3-year fixed or a hybrid mortgage that splits the bet between fixed and variable may offer better protection right now. You get a competitive rate without overcommitting in an uncertain environment.
- If you're renewing soon: It's worth reviewing your options before automatically defaulting to another 5-year term. A 3-year fixed keeps your options open at a potentially lower rate.
- If you're on variable: No change to your payment for now — the BoC is expected to hold. But the bond market is worth watching as the U.S. Fed story develops.
An immaculate 5-bedroom country home on 3.76 private acres in the Enderby/Grindrod area of BC's Shuswap. Updated throughout with a new propane furnace and central A/C, new water softener, new fridge, and new washer and dryer. The large country kitchen opens into the living room, with 3 beds and 2 baths on the main level, plus 2 more bedrooms upstairs. Fenced yard safe for kids and pets, with a garden, orchard, and chicken coop. The real standout is the outbuildings: a 43'x42' shop with a 13' high door (heated, ready for big equipment, mechanics, or serious storage), a multipurpose storage building with 2 parking spots, woodshed, and animal shelter. Minutes from ATV trails, Hidden Lake camping and fishing, a community hall with events, a riverside beach, and a new pickleball court. 10 minutes to Enderby, 45 minutes to Vernon.
Brenda: 778-220-1822 | brenda@bprg.ca
Nikki: 778-677-2935 | nikki@bprg.ca
Financing Example
| Purchase price | $839,000 |
| Minimum down payment | $58,900 |
| CMHC premium | $31,204 |
| Total mortgage amount | $811,304 |
| Mortgage type | 3-yr fixed at 3.99% |
| Amortization | 25 years |
| Bi-weekly payment | $1,965.90 |
Rates are subject to change at any time. This example is for informational purposes only. Individual qualification and terms will vary. Reach out to get your personalized numbers.
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Rob Skoko
The information in this newsletter is for general informational purposes only and does not constitute financial or mortgage advice. Mortgage rates, terms, and financing examples are subject to change and individual qualification. All financing figures shown are estimates based on minimum down payment scenarios and current posted rates. CMHC insurance premium included in total mortgage amount shown. Please consult with a licensed mortgage professional to discuss your specific situation. Rob Skoko is a licensed mortgage broker in BC and Alberta. MAXIMUM Mortgage Solutions – MA - abw.
Market information sourced from MortgageLogic.news / Rob McLister, June 22, 2026. Real estate listing details sourced from brendapattersonrealtygroup.ca. To unsubscribe, email info@skoko.ca.
