If you've heard about the U.S. imposing new tariffs on Canadian goods and thought, "That's about lumber and steel — doesn't affect me," think again.
Because what’s happening right now in global trade isn’t just business headlines — it could have a direct impact on your mortgage renewal, your fixed rate, and even the value of your home.
Let me explain.
Tariffs Are Back in 2025 — And They're Heating Up
This year, the U.S. has escalated its trade stance with Canada:
- Softwood Lumber Tariffs: Increased from 8.6% to 14.54%, with threats of up to 34% on some producers
- Steel & Aluminum: Reimposed 25% tariffs on Canadian metals in March 2025
- Broad Canadian Goods: 25% tariff added on nearly $18 billion of exports, from food products to electronics
- Canada Responds: Matching tariffs on $29 billion worth of U.S. goods
A resolution might be coming in July — but if history is any guide, tariffs don't go quietly.
Flashback: What Happened in 2018?
During former President Trump’s first term:
- Tariffs hit Canadian steel, aluminum, and lumber
- Bond yields surged as global markets responded to inflation risks
- The Bank of Canada paused rate cuts
- Fixed mortgage rates in Canada rose 40 to 70 basis points in 60 days
That meant the average 5-year fixed rate jumped from 2.95% to 3.59%, increasing monthly payments by roughly $200.
What’s Happening in 2025?
We're seeing similar pressure:
- Tariffs are pushing up material and consumer costs
- Inflation is lingering higher than expected
- Bond yields are elevated and volatile
And here's the key: In Canada, fixed mortgage rates follow bond yields — not the Bank of Canada.
So even if the Bank of Canada cuts its overnight rate, you could still see your fixed mortgage rate go up if bond yields spike due to global uncertainty.
Why This Matters: Who's at Risk?
1. Renewing Your Mortgage?
Over 70% of Canadians are expected to renew between 2025 and 2026. This is the biggest wave of mortgage renewals in Canadian history.
If you locked in at 1.99% to 2.59% five years ago, you could face rates in the 4.5% to 5% range.
That could mean a monthly payment increase of $400 to $1,200, depending on your loan size.
And if bond yields spike like they did in 2018, that window could close fast.
What to Do: Start your renewal process 120 days out. Don’t accept your bank’s first offer. Use a broker to compare options and negotiate.
2. Buying Your First Home?
Tariff-driven inflation affects the price of everything: groceries, gas, and yes, your mortgage.
Higher bond yields mean higher fixed mortgage rates, which reduce your purchasing power. A 1% increase in rate can reduce what you qualify for by up to $50,000.
What to Do: Stay below your max budget. Consider variable or short-term fixed options if you're risk-tolerant. Focus on cash flow flexibility, not your "forever home."
3. Refinancing or Restructuring Debt?
Carrying credit card balances or high-interest loans? You’re not alone. Refinancing into your mortgage could drastically lower your monthly payments.
But timing matters. If fixed rates jump, the cost of refinancing becomes higher — and your ability to qualify could be limited.
What to Do: Get a professional to run the numbers now. If there's a window to act before rates rise, take it. Use the extra cash flow to get ahead, not fall behind.
Looking at the Bigger Picture
This isn’t about panic. It’s about planning. The global economy is more connected than ever — and what happens at a trade table between governments can impact your financial life in real ways.
That’s why we created our new series: "Let Me Explain"
In under 5 minutes, we break down complex topics — like tariffs, bond yields, and rate hikes — and translate them into what they mean for Canadian homeowners and buyers.
Because being informed is the first step to being prepared.
Final Word
If you have a mortgage renewal coming up or you're thinking of buying or refinancing in the next 12 months, now is the time to plan. Bond yields don’t wait, and neither should you.
Let’s run your numbers now and build a plan that works in any market.
I’m Tyler Wilson from Pilot Mortgage Group. We help Canadians make smart mortgage decisions in complex markets. No pressure. Just clarity.
Watch the full episode. Share it with a friend. And let’s stop guessing and start planning smarter.
Book a Free Mortgage Renewal Strategy Call
We’ll review your offer, compare it to today’s best options, and give you honest, pressure-free advice.
Whether you work with us or not, you’ll leave the call with clarity, confidence, and a strategy for the next 3–5 years.
Disclosure:
Tyler Wilson is a licensed mortgage broker with Pilot Mortgage Group. This article is for educational purposes only and should not be interpreted as direct mortgage advice. Always speak with a licensed professional before making financial decisions.
