Canada’s economy lost 17,700 jobs in April, while the unemployment rate climbed to 6.9%, its highest level in six months. Normally, weaker employment data would strengthen the case for interest rate cuts.

However, rising oil prices are complicating the outlook.

Key Takeaways

• Canada lost jobs and unemployment increased.
• Economic weakness typically supports lower interest rates.
• Rising oil prices are creating inflation concerns.
• The Bank of Canada is still expected to hold rates steady in the near term.
• Mortgage rates may stay higher for longer.

Why It Matters

A softer labour market suggests inflation pressures could ease as hiring slows and consumer spending weakens. But higher energy costs can push inflation higher, making it harder for the Bank of Canada to justify cutting rates.

This puts policymakers in a difficult position: support a slowing economy or continue fighting inflation.

Impact on Mortgage Borrowers

Variable-Rate Mortgages

Variable rates depend on Bank of Canada decisions. For now, markets expect the central bank to leave rates unchanged.

Fixed Mortgage Rates

Fixed rates are influenced by bond yields and inflation expectations. Rising oil prices could keep upward pressure on yields, limiting rate declines.

The Bottom Line

Canada’s latest jobs report points to a slowing economy, but inflation remains the key concern. As long as oil prices stay elevated, the Bank of Canada may be reluctant to lower rates quickly.

For homeowners, buyers, and borrowers, that means planning for a higher-rate environment may still be the safest approach.

FAQ

Will Canada cut rates soon?

Not necessarily. Weak employment supports cuts, but inflation risks from higher oil prices could delay them.

How do oil prices affect interest rates?

Higher oil prices can increase inflation, making central banks more cautious about lowering rates.

What does this mean for mortgages?

Mortgage rates may remain relatively stable or higher than expected until inflation pressures ease.

Cedric Pelletier – Mortgage Associate – 05.2026

Canada’s latest inflation report delivered encouraging news for mortgage borrowers.

Headline inflation rose 2.8% in April, but the more important number was core inflation, which fell to:

$2.05\%$

That’s very close to the Bank of Canada’s 2% target and the lowest level since 2021.

Key Takeaways

• Core inflation cooled significantly in April
• Gas prices were the main reason headline inflation stayed elevated
• Mortgage interest costs fell for the first time since 2022
• Rent growth continues slowing
• Markets still expect possible rate hikes later this year
• Variable-rate borrowers may get some relief

What’s Driving Inflation Right Now?

Most of April’s inflation increase came from gasoline prices, which jumped sharply year-over-year.

But outside of energy, inflation was much softer:

• CPI excluding food, energy, and indirect taxes was 1.5%
• Rent inflation slowed to its weakest pace in four years
• Mortgage interest costs declined year-over-year

These are signs that higher interest rates are continuing to cool the economy.

Why Markets Still Expect Rate Hikes

Even with softer inflation data, markets are still pricing in possible Bank of Canada hikes later this year.

One reason is inflation breadth — the share of prices still rising above 3%. That figure increased to:

$40.4\%$

This suggests inflation pressures haven’t fully disappeared across the economy.

Still, many economists believe the Bank of Canada will likely hold rates steady unless inflation starts rising again.

What This Means for Mortgage Borrowers

Variable-Rate Mortgages

This report is positive for variable-rate borrowers.

If core inflation stays near 2%, pressure for additional rate hikes may ease, giving homeowners more stability.

Fixed Mortgage Rates

Fixed rates remain tied to bond yields, especially in the U.S.

That means fixed mortgage pricing could still fluctuate even as Canadian inflation improves.

The Bottom Line

Canada’s inflation picture is improving beneath the surface.

Core inflation is close to target, rent growth is slowing, and mortgage interest costs are finally easing.

While markets still see some risk of future hikes, this report gives borrowers cautious optimism that rate pressures may be starting to stabilize.

FAQ Section

What is core inflation?

Core inflation removes volatile items like food and energy to show underlying inflation trends more clearly.

Will the Bank of Canada raise rates again?

Markets still expect possible hikes, but many economists believe rates could remain unchanged if inflation continues cooling.

Is this good news for mortgage borrowers?

Yes. Softer inflation reduces pressure for future rate hikes and may help stabilize borrowing costs.

Cedric Pelletier – Written by the Marketing team at MLN

Canada’s Housing Market Showing Signs of Stability

Canada’s housing market showed modest improvement in April 2026, with home sales rising 0.7% month-over-month according to CREA. While activity remains softer than normal, improving buyer demand and stabilizing prices suggest the market may be finding its footing heading into spring.

Key Takeaways

• Home sales increased slightly in April
• New listings jumped 4.1%
• National home prices declined just 0.1%
• Inventory levels remain balanced nationally
• Inflation and interest rate uncertainty continue to impact buyers

More Listings, More Balance

Spring listings picked up across Canada in April, giving buyers more options and easing pressure in many markets.

The national sales-to-new listings ratio fell to 45.6%, putting Canada near balanced market territory. Inventory also increased to 5.2 months nationally, which is considered a healthy level overall.

For buyers, this means:

• More negotiating power
• Less competition
• More time to make decisions

Home Prices Are Stabilizing

The National Composite MLS® Home Price Index slipped just 0.1% in April — the smallest monthly decline since October 2025.

Year-over-year prices remain down 4.2%, but the pace of decline is slowing, which could help bring more buyers back into the market.

Ontario continues to see the biggest pressure, especially in condo-heavy regions dealing with excess supply.

What About Interest Rates?

Rising oil prices and ongoing geopolitical tensions are creating inflation concerns globally. That could make future Bank of Canada decisions more complicated.

While rates have remained unchanged so far in 2026, another hike cannot be ruled out if inflation stays elevated.

Bottom Line

Canada’s housing market is not booming, but conditions are improving gradually.

With stabilizing prices, healthier inventory, and cautious buyer demand returning, spring 2026 may mark the beginning of a slower, more balanced recovery.

FAQ

Are home prices still falling in Canada?

Yes, but price declines are slowing significantly compared to earlier this year.

Is Canada in a buyer’s market?

Nationally, conditions are closer to balanced, though some regions favor buyers more than others.

Will mortgage rates rise again?

It’s possible if inflation remains high, although the Bank of Canada is still proceeding cautiously.

If your mortgage renewal is coming up and you may sell your home within the next 12 months, do not focus only on the lowest rate.

Flexibility may matter more.

Many Canadian homeowners renew into a fixed-rate mortgage because it feels safe. But if you sell shortly after renewing, you may need to break that mortgage early. That can lead to costly mortgage penalties, especially with some fixed-rate products.

Key Takeaways

• Selling soon? Prioritize flexibility over the lowest rate.
• Fixed-rate mortgages can trigger large penalties if broken early.
• Variable-rate mortgages often have more predictable penalties.
• A HELOC may work as a short-term option before selling.
• Do not rush into an early renewal just because your lender calls.

Why Fixed Rates Can Be Risky Before Selling

A fixed-rate mortgage can be a good choice if you plan to stay in your home for the full term.

But if you renew into a fixed mortgage and sell soon after, your lender may charge a prepayment penalty. This may include an interest rate differential, often called an IRD penalty.

An IRD penalty can be much higher than three months’ interest, depending on your lender, rate, balance, and time left in the term.

That is why a fixed rate may not be the safest choice if your selling timeline is uncertain.

Why Variable Rates May Offer More Flexibility

A variable-rate mortgage may be a better fit if you plan to sell soon.

Many closed variable-rate mortgages use a penalty based on three months’ interest. That can make the cost of breaking the mortgage easier to predict.

Variable rates can move up or down, so they are not risk-free. But for a short period before selling, the penalty savings may matter more than small rate changes.

Could a HELOC Be a Good Short-Term Option?

A Home Equity Line of Credit, or HELOC, may also help if you are confident you will sell soon.

A HELOC can offer:

• Flexible repayment
• Interest-only payment options
• No typical fixed mortgage break penalty
• More control over your timeline

However, a HELOC is not right for everyone. You need enough home equity and must qualify with the lender. In Canada, the revolving HELOC portion is generally limited to 65% of your home’s value.

Should You Renew Early?

Be careful with early renewal offers.

Banks often contact borrowers before maturity. That does not mean you need to sign right away.

If your home may sell before or shortly after renewal, ask about:

• Open mortgage options
• Short-term mortgage options
• Variable-rate options
• HELOC options
• Waiting until closer to maturity

The goal is to avoid locking into a long-term mortgage when you may only need short-term financing.

Questions to Ask Before Signing

Before renewing, ask:

1. What would my penalty be if I sell within 6 to 12 months?
2. How is the penalty calculated?
3. Can I move this mortgage to another property?
4. Is there an open or short-term option?
5. Would a HELOC work for my situation?

Get the answers in writing where possible.

Bottom Line

If you are renewing your mortgage but planning to sell soon, the best mortgage may not be the one with the lowest rate.

It may be the one with the most flexibility.

Before you renew, compare fixed, variable, HELOC, and open mortgage options. A smart renewal decision today could help you avoid thousands of dollars in penalties later.

FAQ Section

Is it bad to renew my mortgage if I plan to sell?

No, but you should avoid a mortgage that creates a large penalty if you sell soon.

What mortgage is best if I am selling within 12 months?

A HELOC, variable-rate mortgage, open mortgage, or short-term mortgage may be better than a long fixed term.

Can I sell right after renewing my mortgage?

Yes, but you may have to pay a mortgage prepayment penalty.

Why are fixed mortgage penalties expensive?

Some fixed mortgages use an IRD penalty, which can be higher than three months’ interest.

Are variable mortgage penalties lower?

Often, yes. Many variable-rate mortgages charge three months’ interest, but always confirm with your lender.

Should I accept my bank’s early renewal offer?

Not automatically. Review your selling timeline, penalty risk, and other options first.

Have you had a mortgage check-up lately?

Most people review their car insurance, phone bill, or subscriptions more often than they review the biggest debt they will ever carry: their mortgage.

A mortgage check-up can help you understand:

✅ If your current rate is still competitive
✅ If your renewal strategy makes sense
✅ If refinancing could improve your monthly cash flow
✅ If debt consolidation could save you money
✅ If your mortgage still fits your long-term goals
✅ If your penalty, prepayment privileges, and structure are working for you

Your bank may not call you when there is an opportunity to save money — but a good mortgage broker should help you stay proactive.

Whether you are renewing soon, thinking about refinancing, planning to buy, or just wondering if your current mortgage is still the right fit, I can help review your options.

Work with a St. Albert mortgage broker and Edmonton mortgage broker who works for you — not the bank.

Book your free mortgage check-up today.

Cedric Pelletier
Mortgage Broker | Maximal Mortgages
Dominion Lending Centres