This is a rental house my brother and I own together.
Great tenants. One of those dream scenarios where they treat the place like it’s their own.
They even finished the basement — without telling us.
We just happened to find out. And honestly? It looks fantastic.
That’s the kind of stuff you can’t teach. They’ve made it a home, and we’re grateful.
Anyway, the mortgage on this property just came due.
So now we’re debating what to do.
And when it comes to rentals, that decision becomes more than just “where are rates going?”
You need to ask:
- Is there enough income to support the new rate?
- Should we pull out equity to buy something else?
- Should we refinance to add another unit?
- Are we planning to sell this in the next 1–2 years?
You get the point.
That said, understanding where rates are — and where they’re going — still matters.
Speaking of interest rates… I’m sure you’ve heard already.
The Bank of Canada held rates again this week.
Third meeting in a row. Prime stays at 4.95%. Variable-rate mortgages stay unchanged. No big surprise.
The sticking point?
Core inflation.
It’s still hovering near 3% — and the BOC doesn’t get comfortable until it’s a lot closer to 2%.
Add in that unemployment actually dropped slightly last month (from 7% to 6.9%)… and you’ve got just enough cover for the Bank to wait and see.
So where does that leave us?
Honestly, in a pretty weird window.
Most people are expecting cuts.
But the market has pushed out those expectations to sometime in 2025… maybe even 2026.
And yet… bond yields have been dropping quietly in the background.
That means fixed mortgage rates have already come down off their peaks.
In fact, 5-year fixed terms in the low-to-mid 4% range are still floating around — even after some recent bumps in yields.
So while everyone’s watching the Bank of Canada…
The real game is already happening.
We’ve entered one of those rare periods where the macro narrative is negative, but the financing environment is actually improving.
And that’s when opportunity tends to knock.
Because while people are distracted waiting for “the big cuts,”
motivated sellers, better lending options, and creative deal structures are already in play.
One more thing:
Don’t underestimate what’s happening under the hood.
Governments are spending more, not less.
Debt is rising.
Tax revenue needs to keep up.
And home prices — like it or not — are part of that equation.
No government wants home prices to fall. It’s bad for budgets, bad for optics, and bad for voter confidence.
So even if rates stay flat for now, the long-term pressure is still tilted toward:
- More spending
- More money printing
- More asset inflation
And fewer opportunities for buyers who wait too long.
So what are we doing with our rental?
It’s a larger property, and there’s potential to add an ADU (accessory dwelling unit) in the backyard down the line.
We’re not making any moves on that just yet — probably not until the current tenants eventually move out — but we like the idea of staying flexible and nimble in the meantime.
So we’re likely going variable — if the discount makes sense.
If not, we’ll go short-term fixed (1–2 years) and keep options open.
In markets like this, we’d rather plan for adaptability than try to time the next big drop.
Until next week,
Vince
P.S.
If you’re debating a renewal, refinance, or how to use your equity wisely, let’s talk. This is the kind of window that doesn’t always look like an opportunity — until it’s already passed.
P.P.S.
Yes, the tenants finished the basement without permission. No, we’re not mad about it. Honestly, they did a better job than most contractors I’ve hired 🙃
