Fixed mortgage rates in Calgary are rising. Yet the Bank of Canada isn’t raising rates. So how is that possible? The answer surprises most people — and understanding it could change how you approach your next mortgage decision.
In fact, fixed and variable mortgage rates are driven by completely different things. Let me explain.
Two Types of Rates, Two Different Drivers
First, let’s talk about variable and adjustable rate mortgages. The Bank of Canada sets the overnight lending rate, and that rate flows directly into these mortgages. So when the Bank holds steady — as it’s doing right now — variable rate holders generally don’t see their rate change.
Fixed mortgage rates, however, work differently. Instead of following the Bank of Canada, they follow Government of Canada bond yields. Bond yields respond to inflation expectations, economic growth, and global risk. Because the Bank of Canada doesn’t control bond yields, fixed mortgage rates in Calgary can rise even when the Bank does nothing.
Why Fixed Mortgage Rates in Calgary Are Rising Right Now
So what’s actually driving the current movement in fixed mortgage rates? Energy prices.
The conflict in Iran has pushed oil and gas prices higher. As a result, inflation expectations have risen. In response, bond investors demand higher yields to compensate for that inflation risk. Consequently, higher yields push fixed mortgage rates up.
This is why fixed rates are climbing even as the Bank of Canada holds steady at 2.25%. These are two separate systems responding to two separate signals. For Calgary homeowners and buyers, this is especially relevant. After all, our local economy has always had a close relationship with energy markets.
The Bank of Canada explains how it sets the overnight rate on its website. Additionally, current Government of Canada bond yields are published daily if you want to track them yourself.
What the Bank of Canada Is Actually Saying
Recently, the Bank released its March policy deliberations. Overall, the message was calm. Canada’s economy has excess supply, and inflation sits near the 2% target. As a result, the Bank has room to look past the energy price spike — for now.
Furthermore, most forecasters expect the overnight rate to stay at 2.25% through the end of 2026. That’s good news for variable and adjustable rate borrowers.
That said, the Bank is still watching closely. A prolonged rise in energy prices makes it harder to ignore inflation risk. On top of that, US trade policy uncertainty and the upcoming CUSMA renegotiations add further complexity. As a result, the Bank has been clear — it won’t lose sight of those risks.
Fixed vs. Variable — What Should Calgary Buyers Do Right Now?
This is the most common question I’m getting right now. The honest answer, however, is that it depends on your situation.
If you’re thinking about a fixed rate, know that Calgary fixed mortgage rates have already moved higher. Therefore, locking in today means locking in at a rate shaped by global energy market uncertainty. For many buyers, though, the predictability of a fixed rate is still worth it. Just go in with clear eyes.
If, on the other hand, you’re considering a variable or adjustable rate, the near-term outlook is stable. The Bank of Canada isn’t moving. However, variable rates carry more risk if the economic picture shifts down the road.
Ultimately, there’s no one-size-fits-all answer. The right mortgage strategy depends on your income, your timeline, your debts, and your comfort with uncertainty. See how I approach the fixed vs. variable conversation with Calgary clients here.
The Calgary Market Right Now
Despite the global noise, Calgary has real reasons for optimism. For starters, Canada’s GDP came in stronger than expected to start 2026. In addition, Alberta is attracting major investment in data centres and AI infrastructure. Over time, that kind of economic activity supports local housing demand.
Meanwhile, February employment took a hit. Severe winter weather during the reference week, however, gets most of the blame. As a result, a strong rebound is expected when the March numbers are released.
The Bottom Line on Fixed Mortgage Rates in Calgary
To summarize — the Bank of Canada is calm, and variable and adjustable rate holders are in a stable position. However, fixed mortgage rates in Calgary have already moved, driven by oil prices and bond yields rather than Bank of Canada policy.
So if you’re making a mortgage decision right now, make sure you know which rate you’re looking at and what’s actually driving it.
Want to talk through your specific situation? I’d love to help.
