More mortgage borrowers lock in rates as rate outlook shifts

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More Canadian mortgage borrowers are seeking fixed-rate mortgages as interest rates appear poised to rise amid ongoing higher-than-normal inflation.

Rates.ca published mortgage trends insights based on its mortgage quote data, “indicative of consumer intent,” according to its spokesperson Laura Fitch.

Its findings show fixed-rate mortgages for five-year terms have become even more popular than they were five years ago when interest rates were at historical lows.

Rates.ca notes that demand remains strong for variable mortgages, too, as consumers consider the directions of the economy, inflation and the Bank of Canada’s overnight interest rate.

Variable rates accounted for 29 per cent of mortgage quotes in August, Rates.ca found. That is up from 21 per cent in the same month last year.

Fixed-rate mortgages still make up most of the activity, representing 71 per cent of quotes in August. Five-year terms remain the most popular among fixed-rates, accounting for three in four quotes, largely unchanged from August 2025.

“Borrowers are much more cautious about variable rates than they were a few years ago because they’ve seen how quickly the interest-rate environment can change,” noted Victor Tran, Rates.ca mortgage and real estate expert.

“Fixed rates remain the more popular choice, and we’re also seeing more homeowners opt for longer terms because they don’t expect to make any major moves in the near future and want more certainty.”

Bond yields in Canada and the United States determine five-year fixed rates, and their rising yields could fuel more demand from borrowers seeking to lock in their interest rates.

Yet other borrowers are willing to consider variable mortgages, which now generally offer lower interest rates than fixed mortgages, Tran said.

“For borrowers willing to take that risk, there can still be short-term savings, but they need to be in a financial position to handle higher payments if rates rise.”