Canadian mortgage borrowers are increasingly turning back to variable-rate mortgages and shorter fixed terms after several years of major interest rate volatility.
A new Canada Mortgage and Housing Corporation analysis published September 8 shows that variable-rate mortgages have regained a significant share of new mortgage originations.
During the first quarter of 2026, variable rates accounted for approximately 35.5% of new uninsured mortgages and 33.6% of new insured mortgages.
That means roughly one-third of new borrowers were choosing a variable rate.
Variable Mortgages Are Becoming Popular Again
Canadian mortgage preferences have changed dramatically over the past several years.
When interest rates began rising rapidly after 2022, many borrowers moved away from variable-rate mortgages.
But CMHC’s data shows variable products have been regaining market share.
Among uninsured mortgages, the variable share was just 4.6% in the third quarter of 2023.
By the first quarter of 2025, it had climbed to more than 36%.
After moving up and down throughout 2025, variable mortgages represented 35.5% of new uninsured mortgages in the first quarter of 2026.
Insured borrowers are showing a similar pattern, with variable mortgages accounting for approximately 33.6% of new originations in Q1 2026.
Canadians Are Also Choosing Shorter Mortgage Terms
Variable mortgages are only one part of the shift.
CMHC says Canadian borrowers have also moved away from traditional longer fixed-rate mortgages and toward shorter fixed terms.
That allows borrowers to renew sooner if interest rates eventually fall, but it can also leave households more exposed if rates rise again.
Canada’s mortgage system means many borrowers renegotiate their mortgage every few years rather than locking in a rate for several decades.
As a result, changes in interest rates can move into household budgets relatively quickly.
35% Of Renewing Borrowers Reported More Financial Pressure
Recent interest rate volatility has already had a significant financial impact on homeowners.
CMHC’s Mortgage Consumer Survey found 35% of mortgage consumers who renewed a mortgage said changing interest rates increased their financial pressure.
CMHC’s earlier 2026 survey found mortgage payments among renewing borrowers increased by an average of approximately $375 per month.
While mortgage consumer confidence has improved compared with last year, renewals continue to be a major concern for households that originally borrowed when rates were much lower.
1 In 4 Borrowers Regret Some Part Of Their Mortgage Choice
The September CMHC analysis also highlighted another notable finding.
Approximately 25% of mortgage consumers reported regrets about some of the characteristics of the mortgage they chose.
Choosing between fixed and variable rates can be particularly difficult because borrowers have to make decisions without knowing where interest rates, inflation, employment or the broader economy will go next.
CMHC notes that choosing a variable or shorter-term mortgage does not necessarily mean someone is making a poor decision.
Different products can make sense depending on a household’s finances, risk tolerance and circumstances.
But those choices determine how quickly future rate changes can affect monthly housing costs.
Canadian Households Carry More Interest Rate Risk
CMHC says Canada’s mortgage structure places a relatively large share of interest rate risk on households.
Unlike the United States, where borrowers commonly lock into long-term fixed mortgages, Canadian mortgages typically renew every few years.
That can benefit homeowners when rates fall because they can access lower rates relatively quickly.
The opposite is also true.
When rates rise, higher borrowing costs can reach households much sooner.
The surge in mortgage rates following 2022 demonstrated how quickly that can happen.
Mortgage Choices Could Matter Even More Going Forward
The return of variable mortgages comes at a time when Canadians continue to face uncertainty over future interest rates and the economy.
Variable products and shorter terms may allow borrowers to benefit sooner if rates decline.
But they can also increase exposure to future rate increases.
With about one-third of new mortgages now variable and many Canadians choosing shorter fixed terms, CMHC says mortgage choices could become increasingly important to household financial stability.
After several years of unusually volatile borrowing costs, Canadians appear increasingly willing to take that risk.
References
Canada Mortgage and Housing Corporation, What Do Canadians Do When Interest Rates Are High?, September 8, 2026.
Canada Mortgage and Housing Corporation, 2026 Mortgage Consumer Survey, May 20, 2026.
Canada Housing Market 
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