Economist Recommends Five-Year Fixed Mortgage Rates
National Bank of Canada analyst Stéfane Marion suggests fixed rates as mortgage delinquency balances climb nationally.
Updated on Oct. 20, 2026 in Residential
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National Bank of Canada economist Stéfane Marion is recommending five-year fixed mortgage rates for borrowers. He noted that structural economic pressures are likely to keep interest rates elevated.
Why it matters
Borrowers are currently underestimating structural forces, such as rising global defence spending and AI-driven energy needs, that exert upward pressure on bond yields. While interest rate increases may be finished, these factors keep long-term borrowing costs high.
Variable-rate insured mortgages are currently at 3.79%, while the best five-year fixed insured rate is approximately 4.04%. Variable-rate mortgages currently hold a 26% share of the market.
The players
Stéfane Marion
He is a chief economist and strategist at the National Bank of Canada.
Mortgage Professionals Canada
This is a national association representing mortgage brokers and professionals across Canada.
Bank of Canada
This is the central bank responsible for Canada's monetary policy and financial stability.
The details
Stéfane Marion shared his outlook at the Mortgage Professionals Canada conference in Calgary on October 21, 2026. He warned that despite a recent recovery in variable rate demand as rate spreads narrowed, borrowers face significant risks from geopolitical and energy-related economic shifts.
Timeline
February 2026: Mortgage Professionals Canada conducted a consumer survey.
Q1 2026: National mortgage delinquency balances increased by 32%.
October 21, 2026: Stéfane Marion presented his outlook in Calgary.
October 28, 2026: The Bank of Canada is scheduled to announce a rate decision.
Culture Shift
This move reflects a broader societal transition where Canadians are moving away from historically popular variable-rate products toward fixed-term security. This trend mirrors a shift in consumer behaviour as households contend with a higher-cost environment that has persisted longer than previous economic cycles.
Homeowners currently holding variable-rate mortgages should consider how the 32% national rise in delinquency balances affects their own debt management and renewal strategy. Those shopping for new mortgages should compare the current 3.79% variable rate against the 4.04% fixed rate to determine if the interest-rate stability of a fixed term outweighs the potential savings of a variable product.
The takeaway
Borrowers should prioritize long-term financial stability given the structural economic forces keeping rates elevated. Assessing one's risk tolerance for rate fluctuations is essential for navigating the current Canadian mortgage market.
What happens next
The Bank of Canada is set to provide a scheduled announcement regarding its interest rate decision on October 28, 2026.
Further reading
For more information on housing finance, visit the Residential section.
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