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How the Iran War Could Hit Your Mortgage
Rate hike bets are back, population growth has reversed, and lenders are returning with a much more selective lens.
Today, we’re covering
💰 Why the Iran War Could Drive Rate Hikes
🌍 Population Drop Hits Housing Demand
💸 Commercial Capital Is Back but Picky
🚗 The $100K Parking Problem
😲 WTF of The Week
Read Time: 4 minutes
💰 Why the Iran War Could Drive BoC Rate Hikes
Source: BNN Bloomberg
The 411: Markets have flipped from expecting Bank of Canada cuts to pricing in 75 bps of hikes by year-end, driven by the Iran war and a spike in oil and LNG prices.
Money markets flipped fast. Traders went from pricing a mid-year cut to pricing 75 basis points of Bank of Canada hikes by the end of 2026.
Odds of a hike next month jumped to more than 20%, up from roughly 4% a day earlier.
Since U.S.-Israeli strikes on Iran began on February 28, oil and LNG prices have surged and the Strait of Hormuz has been shut, choking off nearly 20% of global oil trade.
That is bad news for inflation. Higher energy, fertilizer, and shipping costs are the kind of imported headache central banks hate because they bleed into everything else.
The BoC has held its policy rate at 2.25% since October, but he said it would not let energy-driven inflation become broad or persistent.
Why This Matters: Mortgage pressure is back on the table. If markets are right and 75 bps of hikes land, borrowing costs rise again just as many buyers were waiting for relief. It is also a warning that fixed rates can move before the Bank of Canada does, which means sentiment and affordability can worsen long before any official hike arrives.