On November 4, 2025, the Federal Government presented the 2025 Federal Budget, titled “Canada Strong”. There are a number of significant measures that will affect businesses, including immediate expensing for manufacturing and processing buildings, an increase to the expenditure limit for the Scientific Research and Experimental Development (SR&ED) program, and certain clean energy input tax credits.

Additional measures in the Budget include the removal of the Underused Housing Tax, the elimination of the luxury tax on certain aircraft and vessels, and a deferral of the trust reporting requirements for bare trusts to 2026. Also announced were new rules to expand on the anti-avoidance measures relating to the 21-year anniversary of a trust, as well as anti-avoidance rules for the deferral of tax on investment income using tiered corporate structures.

The measures introduced in the Budget are proposals and not all of the announcements may be enacted into legislation. There is still uncertainty as to whether the proposals will ultimately be implemented as outlined in the Budget documents as well as the timing of when they will be effective.

Full details of Budget can be found by clicking here. Summarized below are a few of the items we believe are most relevant to private companies and individuals.

Business Tax Measures

Corporate income tax rates

No changes to the corporate income tax rates are proposed. As such, the income tax rates as of January 1, 2025, will remain as follows:

Immediate expensing for manufacturing and processing buildings

Currently, eligible buildings in Canada used to manufacture or process goods for sale or lease (manufacturing or processing buildings) are prescribed an annual tax deduction rate of ten per cent (capital cost allowance). The Budget proposes immediate expensing (100% tax deduction) for the cost of eligible manufacturing or processing buildings. This includes the cost of eligible additions or renovations made to such buildings. The incentive is available in the first taxation year that the eligible property is used for purposes of manufacturing and processing of goods for sale or lease, and requires that at least 90% of the floor space of the building is utilized for these functions.

This benefit is for eligible property acquired on or after November 4, 2025 and before 2030. The rate of depreciation is reduced to 75% for 2030 and 2031, to 55% for 2032 and 2033, and then after 2033 the enhanced rate will no longer be available.

Tax deferral through tiered corporate structures

The Budget proposes anti-avoidance provisions relating to the deferral of tax on investment income with a corporate structure that has entities with staggered taxation year-ends. The proposed rules would suspend the dividend refund of a payor corporation upon payment of a taxable dividend if the recipient corporation’s balance due date for the taxation year in which the dividend was received ends after the payor corporation’s balance due date for the year in which the dividend was paid.

The corporate tax refund will be suspended until a payment is made by a corporation in the chain to individual shareholders, or to companies which have less than a 10% share ownership or are not under common control (i.e., corporations that are not “connected”). To accommodate genuine commercial transactions, the rule would not apply to a dividend payor that is subject to an acquisition of control where it pays a dividend within 30 days before the acquisition.

The rules will apply to dividends paid in taxation years that begin on or after November 4, 2025.

Enhancement of Scientific Research and Experimental Development (SR&ED) Tax Credits

The expenditure limit qualifying for the higher investment tax credit rate of 35% is proposed to be increased to $6M annually. This is a significant change from the proposed $4.5M limit announced in the 2024 Fall Economic Statement. The increased limit applies retroactively to taxation years beginning on or after December 16, 2024.

Certain proposals from the 2024 Fall Economic Statement were also confirmed by the government in that there is still an intention to implement the changes. This includes the enhanced investment tax credit rate of 35% (versus the lower 15%) being available to small Canadian public companies and larger private corporation groups, based on taxable capital. Previously, the higher rate was only available for Canadian-controlled private corporations. The phase out of the higher rate begins at $15M of taxable capital (increased from $10M) amongst an associated group, and is eliminated at $75M (increased from $50M). Certain capital expenditures used in SR&ED will qualify for a 100% deduction. Further, the budget contains a plan for an elective pre-claim approval process for vetting of SR&ED projects in advance by the CRA, with a targeted review time of 90 days.

Critical Mineral Exploration Tax Credit (CMETC) and Canadian Exploration Expense (CEE)

The budget expands the eligibility for the CMETC (which is equal to 30% of specified mineral exploration expenses incurred in Canada and renounced to flow-through share investors) for the following criterial minerals: bismuth, cesium, chromium, fluorspar, germanium, indium, manganese, molybdenum, niobium, tantalum, tin, and tungsten. This applies to expenditures renounced under eligible share agreements entered into after November 4, 2025 and on or before March 31, 2027. Starting November 4, 2025, the budget also clarifies that expenses incurred for purposes of determining the quality of a mineral resource do not include expenses relating to determining the economic viability or engineering feasibility of the mineral resource.

Personal Tax Measures

Personal Income Tax Rates

There were no changes to the personal income tax rates except for a decrease to the lowest federal tax bracket from 15% to 14.5% for 2025, and to 14% for 2026 and later taxation years. The lowest federal tax bracket of 14.5% for 2025 applies to taxable income of up to $57,375.

B.C.’s top personal income tax rates for 2025 continue to be as follows:

Home Accessibility Tax Credit

Applicable to 2026 and subsequent taxation years, expenses claimed under the Medical Expense Tax Credit cannot also be claimed under the Home Accessibility Tax Credit. The Home Accessibility Tax Credit is a non-refundable tax credit that applies at the lowest personal income tax rate on up to $20,000 of eligible home renovation or alteration expenses per calendar year.

Canadian Entrepreneurs’ Incentive

The Budget affirms that the elimination of the proposed capital gains inclusion rate increase would result in the removal of this proposed measure.

Personal Support Workers Tax Credit

The Budget proposes to introduce a temporary credit which would provide eligible personal support workers working for eligible health care establishments with a refundable tax credit of 5 percent of eligible earnings, providing a credit value of up to $1,100. The person must ordinarily provide one-on-one care and essential support to optimize and maintain another individual’s health, well-being, safety, autonomy, and comfort, consistent with that individual’s health care needs as directed by a regulated health care professional or a provincial community health organization. The person’s main employment duties must include helping patients with activities of daily living and mobilization. The Budget states that amounts earned in BC are not considered eligible earnings.

Alternative Minimum Tax (AMT)

The Budget confirms that the government intends to proceed with proposed legislation relating to the AMT, including one measure that would restrict the deduction of investment counsel fees (portfolio management fees) to 50% of the expense for purposes of calculating the AMT.

Other Tax Measures

21-year anniversary rules for trusts

The anti-avoidance provisions relating to the 21-year anniversary deemed disposition rules for trusts are proposed to be expanded to include indirect transfers of trust property to other trusts, effective on or after November 4, 2025. These measures are intended to address tax planning that avoid the deemed disposition to beyond the 21-year timeframe, including cases where trust property is transferred on a tax-deferred basis to a corporate beneficiary that is owned by a newly settled trust.

Trust reporting requirements for bare trusts

The Budget confirms the government’s intention to proceed with proposed draft legislation as it relates to reporting requirements for bare trusts, however the rules are now proposed to become effective for taxation years ending December 31, 2026 or later. Therefore, bare trusts are not required to file T3 trust income tax returns for the 2025 tax year.

Luxury tax on aircraft and vessels

The Budget will cease the luxury tax on subject aircraft (with a value over $100,000) and vessels (with a value over $250,000) after November 4, 2025, but will remain applicable to vehicles costing over $100,000.

Carry back rule for estates

One proposal announced in Budget 2024 was to extend a loss carry back for qualifying estates from the first taxation year, to the first three taxation years instead. The Budget provides that this will proceed with retroactive effect to deaths on or after August 12, 2024.

Underused Housing Tax (UHT)

The UHT will be repealed entirely for the 2025 taxation year and onwards. As a result, no UHT would be payable and no UHT returns would be required to be filed.

Automatic tax filing for lower-income individuals

The Budget proposes to provide the CRA with discretion to file a tax return on behalf of lower-income individuals for 2025 and onwards. Eligible individuals include those that have a taxable income below the federal basic personal amount or provincial equivalent (for 2025, the federal amount is $16,129), where all of the income of the individual is from sources for which specified information returns (such as a T4 slip) have been filed with the CRA, and the individual has otherwise not filed a tax return within 90 days following the filing deadline for the year. The individual then has 90 days to review the processed filing by the CRA and submit any changes, or may opt-out of automatic tax filing.

Previously announced tax measures reaffirmed

The Budget confirms that the government intends to proceed with certain previously announced tax measures including: capital gains rollover on Small Business Investments, Substantive Canadian Controlled Private Corporations, exemptions for Employee Ownership Trusts, Excessive Interest and Financing Expenses Limitation Rules, Lifetime capital gains exemption changes, and other rules.

For more information on how any of the proposed changes may have on your business or you, contact your Rise Advisor.

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Written by Rise Advisors

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PwC also anticipates the growth of prefabricated and modular homes in 2026, provided the financing options adapt.

The British Columbia government is proposing changes to its short-term rental laws, including allowing for compliance orders and penalties to be published to deter people from breaking the rules.

Housing Minister Christine Boyle tabled an omnibus housing bill in the legislature, which would make changes to multiple pieces of legislation including the Local Government Act, the Vancouver Charter and the Short-Term Rental Accommodation Act.

Along with the short-term rental changes, the government says the bill would ensure all local governments are meeting small-scale, multi-unit housing requirements that allow for more forms of housing, such as triplexes, row homes and townhouses.

The Housing Ministry says in a statement that the changes will prevent local governments from putting in restrictions that “make it more difficult to build anything other than single-family or duplex housing for communities with more than 5,000 people.”

The changes would also ensure that housing development isn’t limited because a city has rules on parking spaces per unit.

Boyle told reporters at the legislature that the majority of B.C. communities are implementing the province’s rules to build more homes to ease the housing crisis.

“There are a number of communities where there has been a bit more resistance, or where we’re seeing challenges around implementation, and the priority here is consistent implementation across municipalities,” she said after tabling the bill on Thursday.

“These tools will allow us to work with those local governments and push if needed, to make sure that the regulations are applied consistently and that more housing options are available in every community across B.C.”

Cori Ramsay, the president of the Union of B.C. Municipalities, said she expects local governments are going to be disappointed that the province continues to “centralize decision making for housing in Victoria.”

Ramsay, who is a city councillor in Prince George, said Thursday that requiring the same approach to density in all parts of a community drives up the cost for water, sewer and other core services.

“We all have different needs and the ability to maintain local planning at the local level, with local leaders who are in touch with residents, who know their communities, that is essential. That is part of that long-term infrastructure planning process,” she said.

Centralizing decision making around housing from the B.C. legislature takes away from the local residents and leaders being able to make those land-use decisions, she said.

Ramsay said it will have “negative consequences for local government across the province, and it’s going to result in significantly higher infrastructure costs for us.”

Written by The Canadian Press

Canadian stocks hit a new all-time high despite tariff threats and a weakening economy.

The S&P/TSX Composite Index rose 0.3% to climb above the key psychological threshold of 30,000 for the first time on Tuesday. The gauge has posted 45 closing records this year, the most since the recovery from the Covid-19 pandemic in 2021. The rally is being driven by stronger than expected earnings, a flight to shelter in gold names and easing in borrowing costs. And a fresh round of Bank of Canada interest-rate cuts is expected to stoke gains.

“It’s a big milestone obviously because it’s a nice round number,” said Philip Petursson, chief investment strategist at IGM Wealth Management, a firm with $143 billion in assets under management. He added the strength of the benchmark’s performance this year and the milestone would “drive investors to take another look at the TSX.”

The Toronto Stock Exchange is on track to outperform the S&P 500 Index this year for the first time in an up year for both markets since 2016. During that period the TSX suffered a smaller loss than the S&P 500 during the downturn of 2022.

Corporate earnings in Canada have, so far, beat expectations this year at a time when U.S. President Donald Trump has slapped the country with tariffs and when unemployment has trended higher. Amid economic weakening and trade uncertainty, earnings by TSX stocks came in 7.5% ahead of expectations and marked a new high, according to Hugo Ste-Marie, director of portfolio and quantitative strategy at Scotiabank.

“If we had to describe it in one word, we would say: wow!” Ste-Marie wrote in a Sept. 15 note.

Gold miners have been the biggest driver of the TSX rally this year as bullion prices have hit all-time highs and demand for safe haven assets amid geopolitical, trade and interest-rate uncertainty intensify.

According to Fiera Capital Corp. portfolio manager Candice Bangsund, gold represents nearly 12% of the TSX.

The benchmark’s leading sector, materials, has gained 72% this year on the the back of triple-digit gains from the likes of Discovery Silver Corp., SSR Mining Inc. and Lundin Gold Inc.

More support ahead

Bangsund, who said the Canadian equity markets is more attractively valued than its global peers, sees the materials sectors continuing to prop up the Toronto Stock Exchange through 2026.

“Even if there’s decreased demand for oil products or materials products from the U.S. from Canada, if a product like gold is becoming more expensive on net, it creates a bit of a buffer, a bit of an offset” for stocks, said Bloomberg Intelligence strategist Gillian Wolff.

Gold, which strengthens when interest rates fall, is expected to fuel further gains following rate reductions in Canada and the U.S.

“The rate cut advantages everything,” said Brian Madden, chief investment officer at First Avenue Investment Counsel. In addition to gold stocks, he noted the TSX is heavily concentrated in rate-sensitive defensive sectors including utilities and telecommunications as well and financials, all of which are likely to continue performing well.

A handful of standout individual stocks have also lifted the index. Toronto-Dominion Bank and e-commerce provider Shopify Inc., in particular, have provided the two largest boosts to the gauge this year. Shares of TD Bank staged a sharp recovery this year after a series of scandals in 2024 led to restrictions on its expansion in the U.S. and executive changes.

Overall, Canada’s banks have held up better than expected in the face of tariffs and a macroeconomic slowdown. All but one of the Big Six banks came ahead of analyst expectations in the third quarter as the country’s largest lenders set less money aside for potentially bad loans.

Shopify, meanwhile, has climbed this year to briefly become the country’s most valuable stock on a combination of “blowout” quarterly results and general strength in the tech sector.

Written by Bloomberg

Economic news

As the Bank of Canada on Wednesday lowered its overnight benchmark by 25 basis points from 2.75 per cent to 2.5 per cent, experts say homeowners looking to renew their mortgages have a chance to save.

Commercial lenders, like private banks, base their rates on the key policy rate set by the central bank. According to the Bank of Canada’s own research, 60 per cent of all Canadian mortgages will be up for renewal in 2025 and 2026.

Variable-rate mortgages are determined by the central bank’s interest rates, while fixed-rate mortgages are determined by activity in the bond market.

“Renewing a mortgage got a little easier on Wednesday, but only if you’re sniffing out a variable rate,” said Clay Jarvis, mortgage expert at NerdWallet Canada.

“Variables have dipped by up to 30 basis points at some lenders and are well below four per cent at some brokerages and online lenders.” Those looking to wait a little longer to see if the bank cuts rates further should lock down a rate sooner rather than later, said Penelope Graham, mortgage expert at Ratehub.ca.

“If you’re someone who is strongly considering getting a variable mortgage rate and you’re wondering if you should wait until perhaps October or December (for the next interest rate cut), it’s actually a great idea to get a rate hold now for up to 120 days,” she said.

“Even if we do get a couple more rate cuts, you will still enjoy whatever those lowest rates now are.” Jarvis said the Bank of Canada’s rate cut could make variable rates very tempting, but there are risks for borrowers to consider.

“Because of the affordability component, variables can look especially tasty. But it’s really important to remember that once the BoC is done cutting rates, they’ll eventually have to start increasing them,” he said.

“If you’re not comfortable with that level of risk, consider a fixed rate. Fixed rates aren’t as flexible, but they’re predictable and widely available for under four per cent.”

Whether you’re planning to renew with a fixed- or variable-rate mortgage should depend on what your housing needs are, said Leah Zlatkin, licensed mortgage broker and LowestRates.ca expert.

If you’re planning to move in a few years, a variable mortgage might make sense since it typically has a lower penalty if you want to break it.

“That’s going to offer you more flexibility should you need to break it. If everything’s going to remain consistent, and you’re good to go for the next three to five years, you can absolutely lock into a fixed,” she said.

Zlatkin recommends you start shopping for a new mortgage at least four months ahead of your renewal date.

“If you’re sitting in the five per cent range right now, it might be a good time to break that mortgage and look for a lower rate,” she said, adding that the closer to the renewal date you break your mortgage, the lower the penalty is likely to be.

What ends up costing many Canadians when renewal comes around is loyalty to their bank or lender, Graham said.

“If you are renewing with your existing lender, they send you that renewal letter and it says, ‘Hey, here’s your new renewal rate, just sign on the dotted line quick and easy,’” she said.

A recent survey said 69 per cent of Canadians end up staying with their current lender when renewing their mortgage. Another survey said three in four Canadians stick with the ‘Big Five’ banks – RBC, TD, BMO, CIBC and Scotiabank.

“It’s usually not the most competitive rate available because lenders tend to reserve those for brand new clients.”

According to Ratehub.ca analysis, Canadians end up paying $155 a month more on average if they stick with their current lender. Over a five-year period, that’s a difference of around $9,300.

In November last year, Canada’s banking regulator made it easier to switch lenders by removing the stress test requirement for a mortgage switch where the principal amount and amortization period haven’t changed.

“If you’re coming up for renewal, it’s in your best interest to at least explore your other options with other lenders,” Graham said.

Written by Uday Rana

Global News

The newly created Build Canada Homes agency will oversee plans to build 4,000 homes on six federally owned sites, as part of a $13 billion agency budget to speed up affordable home building, Prime Minister Mark Carney said Sunday.

Carney said that the $13 billion will offer financial incentives for builders to construct affordable homes and reduce upfront costs of affordable homebuilding.

Specific locations for the homes have not yet been announced, but Carney said they will be in Dartmouth, N.S., Longueuil, Que., Ottawa, Toronto, Winnipeg and Edmonton.

Construction is expected to begin on the first of these homes next year, according to a senior government official.

“The core challenge present in the housing market is it’s just too hard to build,” Carney said at a press conference in Nepean.

Carney said he’s asked his colleagues to identify land owned by government departments that can be used for housing, which will be added to the list of 88 properties on the Canada Land Bank that are available.

He said this will “help lower costs for builders and most importantly, lower the rents and new home prices for Canadian families.”

Carney said that the new agency will also look to speed up the permitting process, by giving the “green light” to bulk projects.

The government’s rental protection fund, which helps community housing groups purchase private rental units in order to keep them affordable, will continue under Build Canada Homes.

The agency uses the Canada Mortgage and Housing Corporation definition of “affordable housing”, which is costing less than 30% of pre-tax household income.

The new agency will also include a $1 billion fund for transitional housing projects aimed to help people at risk of homelessness.

Build Canada Homes is meant to be the main agency overseeing affordable housing projects that involve the federal government.

“Build Canada Homes will prioritize the use of cost-efficient and modern methods of construction, including factory build, modular and mass timber,” Carney said.

Factory-build homes, he said, can be mass-produced in controlled settings and assembled in days, enabling construction to happen in the winter.

This will include a partnership with the Nunavut Housing Corporation to build some homes off site. The partnership with Build Canada Homes is expected to build 700 homes, about 30% of which will be built off site and shipped to Nunavut, Carney said.

He said the agency will also adopt the federal government’s recently announced “Buy Canadian” policy, which is meant to prioritize the use of Canadian materials and inputs as a way to help bolster the economy in the face of U.S. tariffs.

The agency’s CEO, Ana Bailão, is a former Toronto city councillor and deputy mayor who has served on the board of Toronto Community Housing.

Written by David Baxter, The Canadian Press

Housing prices across Canada remain prohibitively high for many would-be homebuyers, and one expert says that’s partly due to Canadian seniors holding on to their homes longer than they did in the past, exacerbating a nationwide supply shortage.

“I think a lot of seniors today don’t have a better option,” Rishard Rameez, CEO and co-founder of real estate platform Zown, told BNN Bloomberg in an interview on Tuesday.

“There should be some sort of a need to move into a new home, but seniors don’t want to move into a condo where they have to use the elevators and all that. They still want to have a nice backyard where they can host family… but we don’t have those kinds of homes available for seniors.”

A 2023 Canada Mortgage and Housing Corp. report found that the proportion of Canadians older than 75 who are cashing out of the housing market fell steadily between 1991 and 2021.

“A lot of seniors actually decide to stay and age in the same place. Today, about five per cent of seniors sell their homes, compared to 13 per cent for the rest of the general population,” Rameez said.

There are also few policies in place that incentivize seniors to sell their homes in search of a better option, he explained, adding that this causes a reduction in turnover and puts pressure on real estate markets across the country.

And while inventories remain strained, younger Canadians face a “double squeeze” when the cost of renting is factored in, he argued.

“On average, young Canadians pay almost 50 per cent of their net income in rent… so it’s almost impossible for these younger Canadians to save,” Rameez said.

“Without turnover, there’s less options for people to buy from, hence these investors are able to jack up the rental prices and now Canadians are stuck paying these (high) rental prices.”

He noted that the average age of a first-time home buyer in Canada is now over 35 years of age.

“It used to be twenties, it used to be early thirties, now it’s beyond 35. Imagine someone having to pay rent for that many years before becoming a homeowner,” said Rameez.

He said Canada’s policymakers need to be looking at alternative ways to assist young Canadians in purchasing their first property, as homeownership remains a goal for many people in the country, despite the challenges it comes with.

“That’s the Canadian dream; to own your home and build a family,” Rameez said. “These aren’t just homes, these are places where people will build memories and kids will take their first steps.”

With files from The Canadian Press

Written by Jordan Fleguel

Interview of Rishard Rameez, CEO of Zown on BNN Bloomberg

Borrowers are caught in a mortgage rate market that changes by the week, with little sign of stability ahead.

With every passing week, the Bank of Canada faces conflicting economic signals, leaving Canadians guessing about its next move and triggering rapid changes in mortgage rates.

After several weeks with the lowest 5-year fixed rates holding above 4%, several lenders are now offering options in the high-3% range, generally for high-ratio borrowers.

“There was a two-month period where there were lots of rates available in the three’s … and then suddenly, everything headed for the fours over about a two-week period,” says Ron Butler of Butler Mortgage. “Then bond yields took a roughly 25 basis-point reduction, and now we’re back in this very aggressive state.”

Butler notes that while not every lender has followed suit, a number are again pricing select terms below 4% in the past few days, a trend that could just as easily swing back.

“Every single news item to do with interest rates, both here and in the United States, can trigger a change in bond yields and rates,” Butler says. “What we urge people to understand is that it is that volatile; rates can all go back into the fours very soon.”

Conflicting economic signals

The current volatility isn’t driven solely by the trade war and uncertainty over long-term policy, though both play a role.

According to rate expert Ryan Sims of TMG, the market is still trying to figure out how past changes to trade policies and leadership regimes are affecting both Canada and the United States.

“We’ve got two opposing forces right now and the bond market is reacting to every single report,” he says. “You’ve got inflation in Canada slowly creeping up bit by bit, but then you’ve also got the horrible jobs numbers we saw last week.”

High inflation typically pushes the Bank of Canada to raise rates, while weak employment and a slowing economy point to cuts. What’s unusual now is that both forces are appearing at once, Sims says.

Further complicating the matter is the American economic picture, which directly influences Canada’s 5-year bond yield, and with it, fixed mortgages. Though there are some cracks starting to form, the U.S. economy appears to be outpacing expectations.

“Whether you agree with the current administration or not, the data is coming in strong — employment is healthy, GDP is growing at a good clip, inflation is fairly malignant right now — so I don’t think you’ll get the rate cut from the U.S. Fed that everyone was banking on this year,” Sims explains. “It’s a lot harder for the Bank of Canada to cut when the U.S. Fed isn’t cutting.”

Even as the Bank of Canada shows little inclination to cut its policy rate, which drives the prime rate and variable borrowing costs, Canada’s big banks have been lowering mortgage rates after earlier hikes to win over renewers in a slow market.

“They’re being very competitive on rates, and it makes sense, because they’re going to gain some market share, they’ve now got that customer they can cross-solicit to open a bank account, an investment account, a credit card, what have you,” Sims says. “As we approach [their fiscal year-end on] October 31, you’re going to see a lot of banks wanting to pick up market share and pick up really good risk profiles, because it helps their averages out.”

Sims therefore advises clients to use this competitiveness to their advantage. “I’m telling clients to call their bank and say, ‘I’m working with a broker, I’m actively shopping, give me the best possible deal you can; you get one opportunity,’” he says.

The best options for borrowers right now

With the market shifting every few weeks and little clarity on its longer-term direction, experts advise borrowers to base decisions on their own risk profiles.

“I prefer the variable, and the only reason is because I have a free option to lock in at any point in time should I want to do that,” Sims says. “If I see that inflation is not letting down and I need to lock in, I can do that, but if I lock in now and rates plummet, I’m facing high [prepayment] penalties.”

The variable option, Sims adds, could offer more flexibility if Canadians face widespread job losses or economic stress in the coming years, challenges that may be tougher under a fixed mortgage.

However, Robert McLister, a mortgage strategist at MortgageLogic.news, cautions that only those prepared to monitor the markets closely and act quickly should consider a variable rate in today’s environment.

“Unless you’re bulletproof financially and need shorter-term penalty flexibility, go easy on variables,” he advises. “If you model out their performance using today’s rates and forward rate projections, their performance edge is limited for most people. Add in the real dangers of inflation and Ottawa’s fiscal mismanagement, and their appeal shrinks further.”

Instead, McLister recommends a fixed-rate mortgage of three or five years for most, or a hybrid option for those with a little bit more appetite for risk.

“Get a sufficiently long rate hold if you’re home shopping or refinancing,” he adds. “The point is: don’t bet the ranch on much more [interest rate] relief from here.”

Written by Jared Lindzon

for Canadian Mortgage Trends