Tariffs, Once Again — And What It's Doing To Your Rate

The Canada–U.S. trade talks fell apart again over the weekend, and bond markets reacted the way they usually do when uncertainty shows up — yields moved higher. Fixed mortgage rates followed, up somewhere in the 5-to-10 basis point range depending on the lender. Not dramatic, but worth knowing if you're comparing a quote from a few weeks ago. We break the mechanics down in how bond yields set fixed mortgage rates.

On the other side of the ledger, a Bank of Canada rate hike this year now looks close to off the table. Between softening population growth and the drag from trade uncertainty, there's very little appetite left in Ottawa for tightening further. If your term matures in the next 6–12 months, this is the window to model both paths — start with the mortgage renewal hub.

CREA is reporting a fourth consecutive month of gains in the resale housing market — sales ticked up 0.5% in July compared to June. CREA reads this as markets settling back into balance rather than a rebound.

"That's true on the Prairies, in Quebec, and on the East Coast, where a majority of sellers' markets have been steadily cooling off over the past year. More recently, it's also been true of the markets in B.C.'s Lower Mainland and Ontario's Greater Golden Horseshoe, where formerly buyers' or borderline buyers' markets have largely shifted back into balanced market territory."— Shaun Cathcart, Senior Economist, CREA

Prices are still down 5.3% from July of last year. CREA's Home Price Index edged up 0.1% month-over-month but remains 3.3% lower year-over-year. The national average sale price rose 0.2% to $674,819, while new listings fell 1.6%.

Some economists think the market may have already found its floor.

"Volumes and prices have likely bottomed in the hardest-hit markets, but the recovery is going to be flat with little in the pipeline to trigger a forceful rebound."— Robert Kavcic, Big Bank Economist

"Any acceleration in national activity will be gradual, held back by static interest rates, slowing population growth, and lingering economic uncertainty."— Robert Hogue, Housing Economist

Given the collapse of Canada–U.S. trade talks over the weekend, that uncertainty seems destined to persist.

CMHC is forecasting modest economic growth of 0.7% this year, propped up by consumer and government spending along with improving exports. The agency expects ongoing geopolitical conflict and U.S. trade tension to keep weighing on both the economy and the housing market — possibly through 2028.

Recovery is expected to build gradually through 2027 and into 2028, though sales will likely stay below the past decade's average. The Prairies are positioned for the strongest price growth given persistent demand, Quebec should see more modest gains, and Ontario and B.C. are expected to lag due to slower population growth, affordability pressure, and greater supply.

Half the files that crossed our desk this month were incorporated owners, so it's worth separating the headline from what actually moves a deal. A 5-to-10 basis point shift in fixed pricing is noise next to how your income is documented. On a self employed mortgage in Ontario, A lenders price off Line 150, while alternative (B) lenders will read notices of assessment, six to twelve months of business bank statements and corporate financials. Two identical properties can price a full percentage point apart on documentation alone.

Appetite for a mortgage for business owners has held steady through 2026 — alternative and private lenders never priced off a Bank of Canada cut in the first place. What has tightened is scrutiny of the property itself: location, exit and marketability now draw more underwriter questions than cash flow does. If the title sits in a company, read the corporate mortgage guide before you shop — corporate-held files carry dual-guarantee underwriting and a pricing premium personal files don't.