The dream of lower mortgage rates has gripped Canadian homebuyers like a prairie May long weekend storm. According to BMO, 67% of Canadians are sitting on the sidelines, waiting for rates to drop before they jump into the housing market.

But for Calgarians—especially those eyeing their first home or considering an upgrade—this collective hesitation might be more financial fiction than savvy strategy.

Here’s why waiting for lower rates in today’s market could be a costly mistake.

Today’s Rates: Better Than You Think

Let’s start with a dose of reality: mortgage rates today are historically low. That might sound odd in a world where “4% mortgage” headlines read like warnings. But perspective is key.

Over the past 30 years, the average leading 5-year fixed mortgage rate in Canada has been around 4.59%. Right now, average insured and uninsured 5-year fixed rates hover near 3.94%—well below the long-term average.

For younger Canadians, especially Calgarians who started budgeting during the post-2008 era of near-zero rates, this may seem high. But those ultra-low rates were an anomaly—a monetary “Black Friday” sale we may never see again.

The Risk of Waiting

In a city like Calgary, where housing is still relatively affordable compared to Toronto or Vancouver, waiting for a lower rate could backfire—especially if the market heats up again.

Here’s what’s at stake:

• A bidding war comeback. When sentiment flips (and it will), sidelined buyers could flood the market all at once.

• Home prices rebound faster than rates fall. Calgary has already seen steady price growth in desirable neighbourhoods. That trend could accelerate with even a modest rate cut.

• Lost time = lost equity. Every month spent renting is a month not building equity.

Why Fixed Rates Might Be a Bargain

Right now, a 5-year fixed mortgage is a relatively safe and smart play. Here’s why:

• “Real” mortgage rates (adjusted for inflation) are low. Historically, mortgage rates have averaged 2.79 times the inflation rate. Today, they’re closer to 1.78 times. That means mortgages are cheaper, relatively speaking, than they’ve been in decades.

• Inflation still lurks. Despite efforts by central banks, inflation in Canada and globally remains unpredictable. If inflation flares up again, fixed rates today might look like a steal in hindsight.

• U.S. turmoil affects us too. Calgary may be 4,000 km from Wall Street, but our mortgage rates are still tied to the U.S. economy. The 5-year Government of Canada bond yield—what our fixed mortgage rates are based on—is heavily influenced by the 10-year U.S. Treasury. And with U.S. debt, inflation fears, and investor uncertainty rising, Canadian bond yields could continue climbing.

What About Variable Rates?

Yes, variable rates could fall if the Bank of Canada cuts rates. Some economists, like those at BMO and Butler Mortgage, expect up to three rate cuts in 2025. That could bring variable mortgage rates below 5-year fixed rates.

But it’s a gamble.

Even if the BoC cuts by 100 basis points—a scenario some analysts only give a 60% chance—most borrowers would still be better off locking in today’s fixed rate unless they’re highly flexible or planning to refinance or sell in the short term.

And let’s not forget the other side of the coin: inflation could reignite, pushing rates higher again. That’s happened before—in 1973–74, 1980–82, 2021–23—and it could happen again.

The Takeaway for Calgarians

Calgary remains one of Canada’s most liveable—and affordable—major cities. For those who can afford the current rates, locking in a 5-year fixed could be a wise move. The market doesn’t wait forever, and trying to time mortgage rates is like waiting for sunshine during Stampede week—it might come, but not when you need it most.

If you’re in Calgary and thinking about buying or refinancing, don’t just chase the lowest possible rate—chase value. A 5-year fixed from a lender with flexible terms and reasonable prepayment penalties may be the best hedge against the unpredictability of global markets, inflation surprises, and U.S. policy chaos.

Better to ride a well-priced fixed rate now than hope for the perfect storm—and end up getting soaked. Reach out to me directly to discuss your best options.