November 3, 2025
Many borrowers have been watching for rates to drop further—and while some easing is expected, recent forecasts suggest the downward trajectory may be slowing. Major Canadian banks now diverge on 2026 rate forecasts, with several signaling that the easing cycle could end soon. This shift means homeowners and buyers need a Plan B: lock in a favourable rate now, or structure their mortgage in a way that gives flexibility if rates plateau or head upward.
Here’s how to prepare: First, review your amortization and payment strategy. If rates stop falling and suddenly begin climbing again, maintaining a 25-year amortization may cost more than expected. Consider shortening amortization, making lump-sum payments, or switching to a fixed-rate term that gives you payment certainty. Second, assess your renewal or purchase timeline. If you’re renewing in the next 12 months, don’t wait for “the best rate ever”—get multiple quotes, secure a hold if possible, and lock in smart features like prepayment privileges and portability.
Third, keep your debt service ratios tight. Mortgages renewing in 2026 could face meaningful payment increases, which makes your overall debt load and upcoming credit obligations especially important. Avoid taking on new large credit, automotive leases, or big purchases if you plan to renew in the next term. Finally, stay alert to positive signs: housing markets in many regions are showing steadier inventory and improved choice, and rates may still trim a bit—but the window for major savings may be narrowing.
The takeaway: when rate drops might be limited, your next best move is strategy—structuring your mortgage for stability, vulnerability-proofing your renewal, and focusing on what you can control. Whether you’re buying, renewing, or refinancing, acting now outweighs perfect timing. In 2025, the borrowers who stay proactive rather than reactive will be the ones who turn uncertainty into opportunity.
Source: Absolute Mortgage Team