From the Desk of Renée Huse, March 30th, 2026
March has been one of those months where the headlines have felt heavier than usual. If you’ve been feeling uncertain about what it all means, you’re not alone.
What we’re seeing right now isn’t just normal day-to-day movement. There are real forces driving volatility in the bond market, and that is directly impacting fixed mortgage rates.
Why fixed rates are feeling more volatile right now
Over the past couple of weeks, markets have been reacting to a mix of geopolitical risk, stronger-than-expected economic data, and ongoing concerns around inflation and government spending.
Most recently, escalating tensions in the Middle East have pushed oil prices back toward the $100 per barrel range. That matters because higher energy prices can feed into inflation expectations, and inflation is what bond markets care about most.
At the same time, Canadian economic data has come in stronger than expected. Wholesale trade, for example, rose 2.3% month-over-month versus expectations of just 0.4%. Strong data like this reduces the urgency for rate cuts.
We are also seeing continued pressure from government spending, with Canada’s federal deficit widening beyond expectations. More deficit typically means more bond supply, and more supply usually requires higher yields to attract investors.
Markets are pricing in uncertainty fast
There is another layer here that matters just as much: uncertainty.
If you’re wondering why bond markets are demanding higher risk premiums right now, you do not have to look much further than the tone of global leadership.
Over the weekend, comments out of the U.S. around Iran included:
“To be honest with you, my favourite thing is to take the oil in Iran…”
“I think we'll make a deal… but it's possible we won't… because we negotiate with them and then we have to blow them up.”
Whether those statements translate into action or not is not really the point. Markets do not wait for certainty. They price in risk immediately. And that risk is showing up in higher bond yields and, in turn, higher fixed mortgage rates.
The cost of certainty has gone up
This ties into one of the most important shifts we are seeing right now: the term premium.
The term premium is the extra yield investors demand to lock into longer-term bonds. In Canada, that premium has increased by more than 100 basis points since the pandemic.
In plain terms, that means the cost of certainty has gone up.
Even if underlying interest rates start to come down, fixed mortgage rates may not fall as quickly as we have seen in previous cycles. Borrowers are now paying more for the predictability of locking in.
Why variable rates deserve a real conversation
This is where I want to be very clear about how I’m thinking about strategy right now.
In this type of environment, I believe there is a strong case for variable rates, not as a long-term gamble, but as a short-term strategy.
A variable rate is not just about where rates go next. It buys you time:
- Time to let geopolitical risks settle
- Time to see how inflation actually trends in Canada
- Time to watch how the Bank of Canada responds over the next few meetings
- Time to avoid overpaying for certainty at a moment when that premium is elevated
Right now, I am not convinced that paying that higher premium to lock into a fixed rate is the best move for most clients.
And I’ll be transparent about this: the Huses, right or wrong, have moved 100% of our own mortgages to variable rates for the time being.
Not because we think rates are about to drop tomorrow, but because we value flexibility in a market where so much is still shifting.
This approach gives us the ability to reassess and lock in later, when:
- Volatility settles
- Risk premiums normalize
- We have a clearer view of where things are actually heading
The right mortgage strategy depends on you
Of course, this is not a one-size-fits-all decision. Fixed rates still make sense for some clients, especially if stability and payment certainty are the top priority.
But if you are someone who can tolerate some movement and wants to stay adaptable, variable is worth a serious conversation right now.
At the end of the day, this is not about trying to perfectly time the market.
It is about making a decision that aligns with your comfort level, your cash flow, and your long-term plan, while understanding the trade-offs clearly.
My role is to help you navigate all of this, cut through the noise, and build a strategy that actually works for you.
If you want to talk through whether fixed or variable makes more sense for your situation, reach out. The right answer is rarely about headlines alone. It is about your plan, your flexibility, and what helps you move forward with confidence. I'm always here for a chat, renee@spiremortgage.ca
