Variable-rate mortgage holders in the GTA have enjoyed significant savings thanks to the Bank of Canada’s rate cuts in 2024 and 2025. However, Desjardins economists are warning that this favorable period may be coming to an end. With the central bank likely to hold steady or even increase rates in 2026 and beyond, borrowers could face a tougher financial landscape.
According to Desjardins, the Bank of Canada’s policy rate currently sits at 2.25% after 175 basis points of cuts in 2024 and a further 100 in 2025. Variable rates on new insured loans, which were around 7.00% in June 2024, have fallen to slightly below 4.00%. Desjardins anticipates potential rate hikes of 50 basis points from current levels, with two 25-basis-point increases projected for 2027. This shift could impact renewal rates and affordability for many GTA homeowners who opted for variable-rate mortgages. Read more about this forecast and its implications for the Toronto real estate market on the original mpamag.com article.
Read the original story here: https://www.mpamag.com/ca/mortgage-industry/industry-trends/why-2026-could-test-canadas-variablerate-borrowers/560821
