How the War in Iran is Impacting Your Mortgage
Image courtesy of Global News
My view for April 2026 is that Canada’s housing market will stay active, but affordability will remain under pressure in most cities because home prices have started rising again while fixed mortgage rates are facing upward pressure from higher bond yields. I expect buyers in April to become more payment-sensitive, with variable-rate products staying attractive while fixed-rate shoppers may feel more urgency if rates keep drifting above recent sub-4% territory.
What changed in March
In February, affordability worsened in 11 of 13 major Canadian cities, and Ratehub said this was the first time since June 2025 that most markets became less affordable at once. The main reason was not a big jump in mortgage rates, but rising home prices, with Montreal up $14,300 month over month, Halifax up $13,400, Fredericton up $11,600, Calgary up $6,500, Regina up $5,800, and Toronto up $3,600.
At the same time, the fixed-rate side of the market has become less comfortable. NerdWallet reported that the Iran war pushed oil prices higher, drove government bond yields up, and caused several lenders and brokerages to raise three-year and five-year fixed mortgage rates in March. By late March, Ratehub showed the lowest five-year fixed rate at 3.99%, while the lowest five-year variable rate sat at 3.35%, which keeps a noticeable pricing gap in favour of variable mortgages.
Where I think April goes
My expectation for April is that affordability will likely remain strained in the bigger urban markets unless home prices cool quickly enough to offset higher fixed borrowing costs. If bond yields stay elevated, fixed rates may move a little higher or at minimum stay sticky, which would keep pressure on buyers who qualify based on tight monthly budgets.
That said, I do not expect a full market freeze. Stable variable-rate pricing and the fact that many buyers have already adjusted to the current rate environment should keep demand alive, especially among people who were waiting for rate chaos to settle. In my view, April is more likely to be a selective market than a runaway market: well-priced homes should still move, but buyers will be more cautious and less willing to stretch just because inventory looks attractive.
What this means for you
If you are buying in April, I think the biggest risk is focusing only on the sticker price of the home and not on the payment reality. In February, Toronto buyers needed $890 more annual income to qualify for the average home than they did just one month earlier, and Montreal buyers needed $2,800 more. That tells me small price increases are already enough to hurt affordability, even when rates are mostly flat.
For example, if you are a buyer looking at a roughly $600,000 property in a market like Montreal or Halifax, a modest rise in price plus a slightly higher fixed rate can translate into a noticeably higher monthly payment than it would have just weeks earlier. In that situation, someone who gets pre-approved early, compares fixed versus variable properly, and leaves room in their budget will be in a much stronger position than someone shopping right at their maximum limit.
If you are renewing this year, April may also be a reminder not to wait passively for perfect conditions. CMHC said more than 1.5 million households had already renewed at higher rates, and another million were expected to renew in 2026, which means many borrowers are still adapting to a more expensive payment environment. To me, that suggests good planning matters more than trying to perfectly time the market.
Reach out
If you’re buying, renewing, or trying to decide whether fixed or variable makes more sense in this April market, I can help you build a strategy around the numbers instead of the headlines. Reach out to me, Mr. Mortgage (Kechanth Kannan), at +1 (647) 554-2718 or on Instagram @_mrmortgage.
