Ottawa broker says many clients are pushing ahead despite tariff uncertainty
Geopolitical chaos and global economic uncertainty have stretched into 2026, pushing a hoped-for Canadian housing market recovery even further down the line as potential homebuyers wait for a calmer environment to emerge before making their move.
Bond market unease has sent five-year Government of Canada yields higher in recent months, pushing fixed mortgage rates upwards, while speculation is growing about at least one potential Bank of Canada rate hike in the months ahead.
Would-be buyers are still keeping a close eye on the latest political news – but while the announcement of US tariffs at the beginning of last year sent shockwaves around bond markets and hugely dented homebuyer confidence, a degree of acceptance has set in among mortgage shoppers about the trade war.
That’s according to Ottawa-based Smart Debt Mortgages broker Chris Allard (pictured top), who told Canadian Mortgage Professional many clients were still determined to push ahead with their purchase plans even with no end to the trade dispute in sight.
“I get the perception that people have largely tried to tune out some of the news and keep a positive mindset,” he said. “But there’s no doubt that everyone’s aware of what’s happening, and they’re aware that rates are rising and there’s significant concern for that.
“Now, the commentary that I often hear from borrowers, and this is true, is we see when Trump speaks now, the markets don’t automatically go up or automatically go down right away. And so that translates into the conversation that we’re having with our clients because they’re now recognizing that maybe it’s just a bunch of noise.”
Borrowers are still cognizant of the impact a big, unexpected development in the trade war would have for the economy and their plans – but they’re equally focused on making their mortgage work and optimizing their financial picture to move forward with their deal, Allard said.
“They’re trying to just look at their personal budget and try to make an educated decision based on the current environment rather than predicting if home values are up or down or rates are up or down,” he said. “They’re going, ‘What are my payments now? Am I comfortable now? And do I have a safety net?’”
BoC rate not expected to surge, even if a hike is on the way
Opinion is divided among leading economists on what’s in store from the Bank of Canada’s decision this Wednesday. Experts including Canada Mortgage and Housing Corporation (CMHC) chief economist and senior vice president Mathieu Laberge don’t see a hike on the way yet, although Royal Bank of Canada (RBC) now marginally expects a 25-basis-point jump.
Most of the country’s top banks expect rate hikes to arrive at some point over the next year – but none are predicting the Bank of Canada’s benchmark rate, which strongly influences variable mortgage rates, will hit the highs seen in 2023-24.
That’s welcome news for borrowers, according to Allard. “I think a lot of Canadians might be surprised that the banks are not projecting significant prime rate increases,” he said. “It turns out that we did see fixed rate increases – and now it looks as though there won’t be significant prime rate increases.
“So I believe that just means that we might have more clients going into variable once they start to understand that dynamic.”
Clients focus on variable amid fixed-rate rises
Allard said he’s recently noted an increase in clientele wanting variable rates with a static payment amid a wider move away from fixed rates. “Bank of Montreal [BMO] offers that, TD Bank offers that, there’s a few others that offer it,” he said.
“Borrowers are [saying] ‘Well, maybe I can benefit from a rate in the high threes, have a stable payment, even though I’m taking a variable-rate product.’ It’s a really interesting move that we’re seeing from a consumer behaviour standpoint.”
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