With tensions escalating between Israel and Iran, many Canadians are asking: Could this impact mortgage rates at home?
What We Know So Far:
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Oil prices are up 27% this month.
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Rising oil often leads to higher inflation.
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Inflation pressures can push interest rates up — or at least keep them from falling.
A Look at the Past
History offers a few clues:
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During the Iraq War in 2003, oil prices spiked 61%, yet Canada’s 5-year fixed mortgage rates stayed flat.
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During the Gulf War (1990–1991), oil prices doubled — but Canada’s prime rate actually dropped by 3.5%, and fixed rates fell over 2.6%.
In both cases, short-term inflation jumped, but mortgage rates didn’t surge.
What Could Happen Now
Today’s situation is different, but early signs suggest markets aren’t expecting a long-term crisis:
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This isn’t a drawn-out conflict — especially if the U.S. steps in.
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The energy price spike may not last long enough to drive prolonged inflation.
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That means significant mortgage rate increases aren’t likely.
However, short-term fixed rates could still rise slightly if bond yields continue climbing past 3%.
Key Takeaways
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Fixed rates might rise a little — keep an eye on government bond yields.
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Variable rates likely won’t go up, but this may delay future rate cuts.
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If you’re in the market for a home, consider locking in your rate now, especially with rate holds in place.
Whether you’re buying your first place or renewing your mortgage, it pays to stay informed. At TopRankinMortgages, we’ll help you navigate the market with confidence — whatever global headlines bring.
Have questions about how this affects your mortgage? Let’s chat!
