This Week in Canadian Mortgages: March 16, 2026

Bank of Canada Expected to Hold Rates Steady at 2.25%

The Bank of Canada is widely expected to maintain its policy interest rate at 2.25% when it announces its decision on Wednesday, March 18. According to a Reuters poll of 33 economists, markets are pricing in approximately a 98% probability that rates will remain unchanged.

For mortgage holders, this stability offers some predictability. Variable mortgage rates continue to be the lowest-priced borrowing option available, with five-year variable terms now available as low as 3.35%. CIBC economist Royce Mendes noted that “it should come as no surprise” if the Bank holds steady, though Scotiabank economist Derek Holt warned that “layers of uncertainty are getting thicker by the day” due to rising oil prices and global trade tensions.

What this means for you: If you are currently in a variable-rate mortgage, you are likely benefiting from the lowest rates in the market. Those with mortgages coming up for renewal should compare fixed and variable options carefully. Fixed rates provide payment certainty, while variable rates offer immediate savings but carry more risk if global events force the Bank to adjust rates unexpectedly.

CMHC Reports Housing Starts Up 4.5% in February

Canada Mortgage and Housing Corporation released its February housing starts data this week, showing a 4.5% increase over January. The seasonally adjusted annual rate reached 250,900 units, up from 240,148 units in January.

The national housing agency noted that actual housing starts were up 1% year-over-year in centres with populations of 10,000 or greater. While this increase is modest, it signals that residential construction continues despite softer market conditions.

What this means for you: More housing supply is good news for buyers, as increased inventory typically moderates price growth. However, ownership supply specifically remains under pressure, with rental construction dominating new builds. First-time buyers may still face competition for available homes, particularly in the detached and townhome segments.

Fraser Valley Market Remains Firmly in Buyer’s Territory

February data from the Fraser Valley Real Estate Board confirms what local buyers and sellers already know: the market favors purchasers. The sales-to-active listings ratio sits at approximately 12.2%, below the balanced market threshold of 12% to 20%.

Benchmark prices tell the story. Townhomes, a popular entry point for Fraser Valley families, averaged $770,700 in February, down 7.1% compared to February 2025. Overall, prices across most property types have declined 7% to 9% year-over-year.

What this means for you: If you are shopping for a home in Abbotsford, Chilliwack, Langley, or surrounding communities, you have negotiating power. Inventory has increased, and sellers are more willing to consider offers below asking. For sellers, pricing realistically and preparing your property for showing is essential in this competitive environment.

Federal Government Eliminates GST for First-Time Buyers on New Homes

The federal government delivered good news for first-time buyers this week when legislation eliminating the Goods and Services Tax on new home purchases received Royal Assent. The GST relief applies specifically to first-time buyers purchasing new construction.

This change represents meaningful savings. On a $500,000 new home, the GST relief could reduce your total purchase price by approximately $25,000. The measure complements existing first-time buyer programs, including the Home Buyers’ Plan and First Home Savings Account.

What this means for you: If you are a first-time buyer considering new construction, this policy makes that option significantly more affordable. The savings could cover closing costs, moving expenses, or provide a buffer for immediate renovations. Speak with your mortgage broker about how this affects your overall affordability calculations.

Housing Supply Report Warns of Future Price Pressure

CMHC’s Spring 2026 Housing Supply Report reveals a mixed picture. While housing starts rose 6% in 2025 to 259,000 units, ownership supply specifically remains under pressure. Rental construction is dominating new development, while condo presales have weakened due to market conditions.

The British Columbia Real Estate Association issued a more concerning warning. According to their analysis, unsold inventory, weak construction activity, and stalled presales could cause BC home prices to jump 27% by 2032. The report draws parallels to the period following the 2008 recession, when low demand caused inventories to rise and building to slow. When demand returned, insufficient supply drove prices up 47% between 2010 and 2019.

What this means for you: Current market softness offers a window of opportunity for buyers. However, those waiting on the sidelines should consider that supply constraints may drive prices substantially higher once demand recovers. If you are financially ready to buy, acting during this buyer’s market could save significant money compared to waiting several years.

What This Means For You

This week’s news presents a clear message for Fraser Valley borrowers: the window for buyer-friendly conditions remains open, but it will not last forever.

For buyers: Interest rates are stable, prices have softened 7% to 9% from last year, and you have negotiating power. The new GST relief for first-time buyers purchasing new construction adds meaningful savings. If you have been waiting for the right moment, conditions are favorable.

For homeowners renewing: Variable rates remain the lowest-cost option, but fixed rates offer payment certainty during uncertain times. With the Bank of Canada expected to hold rates steady through 2026, either choice is defensible depending on your risk tolerance.

For sellers: Pricing realistically is critical. With sales 33% below the ten-year average across BC, buyers have options. Properties priced appropriately for current market conditions are still selling, but overpriced listings linger.

At Browne Mortgage, we track these trends daily to give our clients accurate, actionable advice. Whether you are buying your first home, renewing an existing mortgage, or considering an investment property, contact us to discuss how current market conditions affect your specific situation.