Is Now the Best Time to Lock in a Mortgage Rate? Expert Insights

With interest rates shifting and the Canadian housing market entering a new phase, many homeowners and buyers are wondering:

“Should I lock in my mortgage rate now — or wait for rates to drop?”

The decision depends on expert forecasts, your financial goals, and how comfortable you are with market uncertainty. Here's what Canadians should know when deciding whether to lock in a mortgage rate in 2025.

🏦 What Does Locking In a Mortgage Rate Mean?

A rate lock guarantees your interest rate for a set period of time — usually 90 to 120 days. This protects you from rate increases while you shop for a home, renew your mortgage, or prepare to refinance.

You keep the locked rate even if the market goes up.
If rates go down, you may be able to renegotiate or switch products depending on your lender.

📉 Where Mortgage Rates Stand Right Now

As of 2025:

• Fixed rates have stabilized and are slowly trending downward

• Variable rates remain higher but may decline later in the year

• Bond yields (which influence fixed rates) have cooled

• Economists expect gradual rate cuts beginning mid-to-late 2025

This creates a unique window where locking in a rate may or may not be the right move depending on your situation.

🔮 Expert Forecast: Will Rates Drop in 2025?

Most major Canadian banks predict:

✔ Gradual rate cuts starting mid-2025

✔ Moderate fixed-rate declines as bond yields soften

✔ Larger rate relief expected in 2026

✔ No return to ultra-low pandemic-era rates

This means waiting might save money — but the timing remains uncertain.

🧠 Should You Lock In a Mortgage Rate Now? Key Factors to Consider

✔ 1. How Soon Are You Buying or Refinancing?

• Buy within 60–120 days → Lock your rate

• Buying later this year → Consider floating and re-locking later

Rate holds protect you at no cost.

✔ 2. Are You Risk-Averse?

If you worry about payments rising or want predictable budgeting, locking a fixed rate now may offer peace of mind.

✔ 3. Are You Renewing in 2025?

Most renewals will still be higher than past terms.
Lock early to shield yourself — but choose shorter fixed terms (2–3 years) to stay aligned with expected rate declines.

✔ 4. Market Trends: Will Waiting Help?

Waiting could pay off if rates decline as forecast.
BUT the risk is that global factors (inflation, geopolitics, bond markets) push rates upward unexpectedly.

✔ 5. Your Current Mortgage Type

• On a variable rate?
  You may benefit from waiting if expecting cuts.

• On a fixed rate nearing maturity?
  Locking protects you from potential short-term spikes.

🔁 Fixed vs. Variable: What’s Better to Lock?

Locking in a Fixed Rate Now:

✔ Stability in uncertain markets
✔ Good for long-term homeowners
✔ Predictable payments

Staying Variable for Now:

✔ Potential savings if BoC cuts rates in 2025
✔ Lower penalties if breaking your mortgage
✔ More flexibility

🔍 Which Canadians Should Lock in Now?

✔ First-time homebuyers

Your affordability is sensitive to small rate changes.

✔ Borrowers renewing within 90–120 days

Lock now to avoid short-term spikes.

✔ Homeowners needing predictable budgets

Stability often outweighs rate speculation.

✔ Anyone refinancing for debt consolidation

Lower fixed rates help maximize savings.

⛔ Who Should Wait?

✔ Borrowers expecting better rates in late 2025

✔ Variable-rate holders comfortable with short-term volatility

✔ Homeowners planning to sell or refinance soon

Waiting could secure lower rates — especially as the market shifts into an easing cycle.

⚠️ Don’t Forget About Mortgage Penalties

If you're considering breaking your mortgage to lock into a better rate:

• Fixed mortgages carry expensive IRD penalties

• Variable mortgages only charge 3 months' interest

Always run the numbers with a broker before locking in.

🚀 Final Verdict: Should You Lock In a Mortgage Rate Now?

There’s no one-size-fits-all answer — but experts suggest:

⭐ Lock in now:

If you need certainty, are renewing soon, or want fixed payments.

⭐ Wait:

If you're expecting rate cuts, are comfortable with risk, or prefer variable flexibility.

The best strategy depends on your budget, timeline, and risk tolerance — and a mortgage broker can help tailor the decision.