Variable rate mortgages in Canada – what will happen in 2022?

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“Incomes will grow too but, all else equal, it will be hard for prices to keep powering through that given where valuations already are,” BMO said.

Read more: Mortgages in 2022 – Four trends to look out for

These trends will build on lenders’ decision to reduce their discount spreads to the prime rate by the tail end of 2021, said Sung Lee, director of sales and underwriting at IntelliMortgage.

“Over the last few months with bond yields spiking, we’ve seen fixed rates start increasing quite significantly,” Lee told Canadian Mortgage Professional in December. “And meanwhile, variable rates were lagging, so I think lenders were starting to look at closing the loop a little bit and reducing the gap. … We’ve also noticed on our end an increase in clients inquiring [about] and applying for variable rates over fixed, with the spread between the two anywhere in the realm of 125 basis points.”


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