The Bank of Canada has not moved in months.

Your mortgage rate just went up anyway. Most people are confused by this. They watch the BoC announcements, see the rate hold steady, and assume their mortgage costs will too. That is not how fixed rates work.

Fixed mortgage rates are not set by the Bank of Canada. They are set by bond yields. And bond yields do not wait for central bank meetings. Here is the chain reaction most people miss. A war breaks out in the Middle East. The Strait of Hormuz closes. Global oil prices spike. Energy costs rise across the economy.

Now here is the part that catches people off guard. Inflation does not need to arrive for rates to move. The 𝘳𝘪𝘴𝘬 of inflation is enough. Bond investors see higher energy prices and start pricing in future inflation. They demand higher yields to compensate.

Lenders see those yields rise and adjust their fixed mortgage rates accordingly.In the past three weeks alone, fixed rates climbed by half a percent. The five-year fixed went from around 4% to 4.95%. And the Bank of Canada did nothing. That is the disconnect most homeowners do not understand.

Variable rates follow the Bank of Canada. Fixed rates follow bond markets. Bond markets follow global risk.

Right now, 1.4 million Canadians are renewing their mortgages this year. Many of them locked in at rates from 2021. They are walking into renewals expecting stability and finding something very different. Here is what most people miss. You do not need to wait for the Bank of Canada to act. The market already moved. And if uncertainty continues, it could move again.

If your renewal is coming up, now is the time to lock in a rate hold. Not when the letter arrives. Now. The homeowners who understand this are not reacting to rate announcements. They are watching the forces that drive them.

Ryan Erikson 250-893-0116

ryan@modernmortgagegroup.ca