If you’ve been watching the news lately, it’s easy to feel like the floor is moving underneath the housing market again. We spent the start of 2026 feeling pretty good, inflation was finally cooling off, and it looked like the Bank of Canada was ready to let off the gas. Then, the conflict in Iran hit, the Strait of Hormuz became a giant question mark, and suddenly oil is sitting at more than $100 a barrel.

In the market, we’re seeing a lot of “wait and see” energy right now. But the truth is, while we can’t control what happens in the Middle East, we can definitely control how we react to it. Here’s a breakdown of how this global mess is actually hitting your bank account and what you should do about it.

Why oil prices are the new interest rate

People often ask me why a war halfway across the world matters to a homebuyer in Ontario or BC. It comes down to one word: Inflation.

The Bank of Canada has one main job, keep inflation at two per cent. When the price of oil spikes, it’s not just about what you pay at the pump. It’s the cost of shipping food to the grocery store and the cost of manufacturing everything we buy. This is “cost-push” inflation, and it’s a problem for the BoC.

Before this conflict, we were all pricing in a series of rate cuts for the back half of 2026. Now, those cuts are on life support. If energy prices stay this high, the BoC might have to keep the overnight rate at 2.25 per cent much longer than anyone wanted. They are stuck in a corner, and that means your variable-rate mortgage is likely going to stay right where it is for the foreseeable future.

The bond market is nervous and your fixed rate knows it

Here’s something many people miss: Fixed mortgage rates don’t actually care what the Bank of Canada does today. They care what the bond market thinks is going to happen three years from now.

Right now, the bond market is a tug-of-war. On one side, you have investors running to “safe” government bonds because they’re scared of the war. Usually, that would pull mortgage rates down. On the other side, you have the fear that this oil spike is going to make inflation “sticky” again.

Lately, the inflation fear is winning. We’ve seen five-year bond yields bouncing around, and lenders have already started nudging their fixed rates up by 25 to 40 basis points just to protect themselves. If you’re sitting on a pre-approval with a locked-in rate, do not let it expire. We are in a window where the “cost of waiting” could go up significantly in just a matter of weeks.

The reality of the 2026 renewal wave

This is where the rubber hits the road. This is the year a massive chunk of Canadians, many of whom locked in those low two-per-cent rates back in 2021, are finally hitting their renewal date.

When you combine an approximately four-per-cent renewal rate with the fact that everything else in life, such as gas, groceries and heating, just got more expensive because of the Iran conflict, the “payment shock” is real. We’re seeing it every day at Homewise.

My advice right now? Stop looking at five-year fixed terms. In this environment, you’re paying a “volatility premium” to lock in for five years. We are pointing a lot of our clients toward three-year fixed terms. It’s a “bridge” strategy. It protects you from the current chaos, but it doesn’t lock you into these higher rates for the next half-decade. One would hope, that over the next few years the global energy situation will have stabilized, and you’ll be in a much better position to commit long-term.

Is the spring market cancelled?

Actually, quite the opposite. When headlines get scary, the “tourist” buyers, the people who aren’t really serious, drop out.

If you’re a buyer who is actually ready to move, this is your leverage. For the first time in a long time, sellers are feeling the pressure. We’re seeing deals get done with actual conditions again. You can actually get a home inspection. You can actually negotiate on price. The “noise” of the war is creating a window of opportunity for people who can see past the next six months.

Our perspective

The Canadian housing market has survived plenty of “unprecedented” global events. We have a massive housing shortage and a population that is still growing. Those fundamentals don’t care about oil prices.

What matters is your specific math. Global unrest creates a lot of smoke, but my job is to help you see the house through the haze. Don’t wait for the news to get better before you start planning. By the time the headlines are “safe,” the best deals and the best rates will already be gone.

If you’re worried about your upcoming renewal or you’re trying to figure out if you should jump into the market now, it’s a good time to speak with an unbiased mortgage or real estate professional. Our team at Homewise is having many of those conversations right now, as it’s a great way to have all of the info you need to make an informed decision.