Canada is in the midst of one of the largest mortgage renewal cycles on record, and for Alberta homeowners, the decision between fixed and variable rates has never been more complicated.
According to the Bank of Canada, roughly 60 per cent of outstanding mortgages will renew during 2025 and 2026, with more than one million loans expected to reset this year alone. A recent TD Bank survey reveals that two-thirds of homeowners facing renewal are planning to lock in a fixed-rate mortgage, with the 5-year term proving the most popular choice.
But while fixed rates offer peace of mind in an unpredictable economic environment, mortgage professionals say variable-rate options deserve serious consideration—particularly given current pricing advantages.
The Variable Rate Advantage
Fixed mortgage rates remain stuck above 4 per cent across Canada, but variable-rate options are currently priced around 3.35 per cent for a 5-year term. That's a significant gap—roughly 69 basis points—that's catching the attention of borrowers willing to take on floating-rate risk.
Penelope Graham, mortgage expert at Ratehub.ca, says the savings are compelling for homeowners with the financial capacity to weather potential rate increases.
"This is a great option for anyone looking to reduce the payment shock of having to renew their mortgage rate in a higher interest rate environment," Graham explained. "Given it sits 69 basis points below the lowest 5-year fixed-rate option, it provides strong incentive and savings for borrowers with the risk tolerance to take on a floating rate."
Interestingly, variable-rate mortgage inquiries on Ratehub's platform jumped significantly this year. Between January and March 2026, variable products accounted for about 30 per cent of all inquiries—more than triple the 10 per cent share from the same period last year.
The Risk Factor
The catch? Borrowers who opt for variable need to be financially prepared for two scenarios: absorbing higher monthly payments if rates climb, or locking into a fixed product mid-term if market conditions shift unfavourably.
Graham cautioned that the Bank of Canada would need roughly three consecutive 25-basis-point rate hikes to eliminate the current advantage variable rates hold over fixed options. With geopolitical tensions and persistent inflation pressures, this scenario remains plausible.
Global Tensions Could Reshape the Outlook
Ron Butler of Butler Mortgages offers a starkly different perspective on rate direction—one tied directly to international events. Butler believes geopolitical developments, particularly ongoing tensions in the Middle East, are the primary driver of fixed mortgage rate movements in Canada right now.
"This war is entirely the driver of fixed mortgage rates," Butler stated. "If it becomes a year-long war, eventually all central banks will have to adjust, and that might mean significant increases."
According to Butler's analysis, if Middle East tensions persist and drive up commodity prices for fuel and groceries, the Bank of Canada may be forced to raise interest rates to combat inflation. However, if the conflict resolves within weeks or months, central bank attention could pivot to Canada's underlying economic challenges and the renegotiation of the Canada-U.S.-Mexico trade deal—potentially allowing for rate cuts this summer.
One Size Does Not Fit All
Both experts emphasize that mortgage decisions must be tailored to individual circumstances. With two-thirds of homeowners expressing anxiety about their renewal and roughly one-third of prospective buyers planning 2026 purchases, the stakes are high.
Mortgage brokers recommend that borrowers assess their personal risk tolerance, financial emergency reserves, and long-term stability before choosing between fixed and variable products. Markets and rates can shift rapidly, making professional guidance essential for Alberta homeowners navigating this renewal cycle.
This article is based on reporting from Canadian Mortgage Trends, a leading source for Canadian mortgage market analysis and trends.