Rising trade tensions between Canada and the U.S. have raised questions about how tariffs and economic uncertainty could affect mortgage rates.

While it’s impossible to predict every market shift, let’s assess the most likely impacts to help you make informed financial decisions.

Mortgage rates go up or down?

Mortgage rates are influenced by many factors, but the biggest driver right now is how the Bank of Canada (BoC) responds to trade-related economic shifts.

The most likely outcome: lower rates

If trade tensions weaken the economy and lead to job losses or slower growth, the Bank of Canada is expected to cut interest rates to support borrowing and spending. ATB’s economics team forecasts that if tariffs persist, the BoC could lower rates to 2.0% by mid-year and possibly 1.5% by year-end.

Lower BoC rates could reduce borrowing costs, making mortgages more affordable for homebuyers and homeowners looking to refinance.

What could cause rates to rise instead?

If tariffs push up inflation—for example, by increasing the cost of goods and services—the BoC may need to raise rates to keep inflation under control. This would make mortgages more expensive.

Right now, however, the stronger likelihood is that trade uncertainty will slow the economy more than it will drive inflation—meaning lower rates are the more probable scenario.

Homebuyers and Homeowners

If you’re planning to buy a home or have an upcoming mortgage renewal, choosing between a fixed-rate or variable-rate mortgage depends on your comfort level with potential rate fluctuations and market outlook.

• Considering a variable rate: Variable rates may reduce your monthly payments as long as rates continue to decline. However, since they fluctuate with market conditions, it’s important to consider your comfort level and ability to manage payments that could increase in the future.
• Seeking stability: If you prefer predictable payments and want to lock in a rate now, a fixed-rate mortgage may provide peace of mind against future increases.

For clients who are renewing a mortgage, ATB offers competitive rates that make renewal a smooth process. Connect with an ATB mortgage specialist to explore current rates and offers.

Uncertainty & opportunities

Trade tensions introduce uncertainty, but they also create opportunities for buyers and homeowners who plan strategically. The most likely outcome is lower mortgage rates, making home ownership more affordable. However, keeping an eye on job market trends and inflation will be key in determining how Alberta’s housing market responds.

An ATB mortgage specialist can help you navigate these changes. Whether you’re looking to buy, refinance, or invest, book a consultation today to explore your best options.