What could mortgage rates look like in 2027?

No one knows exactly where mortgage rates will be in 2027, including the banks and the Bank of Canada. What we can do is see where rates are now, what moves them and what forecasters currently expect, then plan for a range of outcomes.

The short version: the Bank of Canada's policy rate is 2.25%. Forecasts compiled in late summer generally expected rates to stay near current levels or rise modestly through 2027, rather than fall. Plan your budget for more than one outcome.

Where rates are now

• Policy rate: 2.25%, held at the September 2, 2026 decision. The next decision is October 28, 2026.
• Prime rate: 4.45%, which sets variable rates.
• Fixed rates: they follow the five-year Government of Canada bond yield, which was about 3.35% at the start of September.
• Best rates in October 2026: around 3.99% to 4.09% for five-year fixed insured mortgages, and about 3.40% for variable. Your own rate depends on your lender, down payment and credit.

These figures change, so check current offers before you decide.

What moves rates

• Inflation: the Bank raises its policy rate to slow inflation and cuts it to support the economy.
• Jobs and growth: a weak economy pushes toward cuts, a strong one toward holds or increases.
• Bond yields: investors' expectations about inflation and future policy rates drive fixed mortgage rates.
• Trade and global events: tariffs, US interest rates and global markets can change the outlook quickly.
• Lender competition: lenders' own costs and appetite for new business affect the margin they add.

What forecasters expected

Late-summer 2026 forecasts from major Canadian banks generally expected the policy rate to stay near current levels or rise modestly through 2027, but forecasts differed significantly. Treat them as a range of opinion, not a promise. They were made before the October 28 decision, and we will refresh this guide afterwards.

Three ways 2027 could go

• Steady: rates stay near today's levels. Renewals change little.
• Gradual increase: inflation or bond yields push rates up a little.
• Surprise cuts: a weaker economy or a trade shock lowers rates.

What it means for your payment

On a $400,000 balance with 20 years left, the payment is about $2,417 at 4%, $2,629 at 5% and $2,849 at 6%. Each extra point of rate costs roughly $210 a month.

How to plan

• Know your renewal date and test a payment 1 or 2 points higher.
• Choose fixed or variable based on how much change you can handle.
• Get a rate hold when buying and shop at renewal.
• Keep a cushion in your budget instead of relying on a forecast.

Forecasts have been wrong in both directions before.

Sources: Bank of Canada: policy interest rate, Canadian Mortgage Trends: Bank of Canada holds policy rate at 2.25%.