In Canada’s shifting mortgage landscape, one thing is clear: uncertainty is running high. A new survey conducted by TD Bank in partnership with The Harris Poll reveals that Canadians are sharply divided over where interest rates are heading next. This division is not just academic—it’s shaping how families approach homebuying, refinancing, and long-term planning.

Survey Findings: A Nation Without Consensus

The survey highlighted the following split:

32% of respondents believe rates will rise again.
27% expect cuts in the months ahead.
29% think rates will hold steady.

This nearly even split underscores how confusing the current environment is for everyday Canadians. With so much at stake in monthly mortgage payments, it’s no surprise that this uncertainty is weighing heavily on household budgets and financial decisions.

Why Canadians Are Divided

Several factors explain why borrowers are unsure about the rate direction:

Mixed economic signals: Inflation has cooled from its 2022 peak but remains sticky in some areas like housing and energy.
Global headwinds: Trade tensions and geopolitical risks could trigger fresh volatility.
Bank of Canada messaging: While policymakers reaffirm their 2% inflation target, they’ve also signaled flexibility, leaving the door open to both rate hikes and cuts.

Impact on Homeowners

For existing homeowners, rate uncertainty translates into real stress:

Renewals: Many borrowers face renewal at significantly higher rates, with some bracing for 10–20% payment increases.
Refinancing delays: Unsure whether to lock in now or wait, households are postponing refinancing decisions.
Variable-rate holders: These borrowers are in a wait-and-see mode, hoping for eventual cuts but wary of possible renewed hikes.

Impact on First-Time Buyers

Prospective buyers are also caught in the middle:

Affordability calculations are tough. Should they stretch to buy now before rates potentially rise, or wait in case rates ease?
Market psychology matters. If many buyers choose to wait, demand slows further, adding downward pressure on prices.

Expert Opinions

Financial analysts note that uncertainty itself can be as damaging as a rate hike. “When households don’t know which way rates are going, they tend to freeze,” says a Toronto-based mortgage strategist. “That hesitation slows real estate activity and puts more pressure on affordability planning.”

Why It Matters

For homeowners: Payment shocks at renewal could become a key financial stress point.
For buyers: Hesitation could mean missing opportunities if rates fall—or avoiding mistakes if they rise.
For the economy: Sluggish housing activity affects construction, retail, and even employment.

Canada’s mortgage borrowers are navigating a fog of uncertainty. With no clear consensus on where rates will head next, the best strategy may be flexibility—keeping an eye on both fixed and variable products, and working closely with mortgage professionals to stay ahead of policy changes.

Have Questions? Contact Us