Mortgages taken out in 2020 and 2021, when five-year Government of Canada bond yields – the most popular fixed mortgage rate – were below 1 percent, are coming up for renewal (some already have). These renewals are set to occur in a vastly different environment, with the five-year yield now at 3.7 percent. This increase has come alongside an even sharper jump in US yields, as markets continue to price in higher inflation and uncertainty south of the border. Because Canadian and US bond markets are closely integrated, rising US yields tighten financial conditions here at home even when the Bank of Canada leaves its overnight rate target unchanged, as it has since last November. For renewing households, that means higher payments, raising concerns about household finances and financial system stability.
For more on how mortgages relate to financial stability, see this C.D. Howe Institute report.
Note: Month-end values. September 2026 reflects the latest available data.
Source: Bank of Canada, Board of Governors of the Federal Reserve System (US) H.15 (via FRED).
