Published：Mar 18, 09:00Last updated：Mar 27, 00:02

Global Conflicts Drive Surge in Mortgage Rates

Mar. 18, 2026 09:00

Canadian fixed mortgage rates have increased significantly due to rising oil prices and bond yields, driven by the Middle East conflict. Since late February, five-year fixed rates have risen from about 3.9 percent to 4.2 percent. Experts warn that if oil supply volatility and inflation persist, fixed mortgage rates are likely to stay elevated for some time.

Summarized

11News

6Media

Mar. 26, 2026 21:30

US mortgage rates increased for the fourth consecutive week to 6.38%, the highest in six months, due to market turbulence from the Iran war. The average monthly payment for a $1 million loan rose to about $6,242. The report was published on March 26, 2026.

Mar. 27, 2026 00:02

On March 26, 2026, Freddie Mac reported that the average 30-year fixed mortgage rate in the US increased to 6.38%, the highest since September 2022, influenced by rising bond yields and oil prices, potentially impacting the housing market recovery.

Mortgage rates in both the United States and Canada have surged to multi-month highs, driven by escalating oil prices and bond yields amid ongoing conflict in the Middle East, particularly the Iran war. The increases are impacting homebuyers, the housing market, and broader economic recovery efforts, with experts warning that rates may remain elevated if inflation and geopolitical tensions persist. Toronto Star+2

📈 Rising Mortgage Rates Across North America

Since late February, Canadian five-year fixed mortgage rates have climbed from approximately 3.9% to 4.2%, while in the US, the average 30-year fixed mortgage rate has risen for four consecutive weeks, reaching 6.38%—the highest in over six months. This marks a significant jump from 6.11% just a week prior and is the highest since September 2022. The increases are attributed to higher bond yields, which reflect investor concerns over inflation and global instability. Toronto Star+2

🛢️ Impact of Middle East Conflict and Oil Prices

The ongoing conflict involving Iran has led to oil supply volatility, pushing oil prices higher and fueling inflation fears. These factors have directly influenced government bond yields, which serve as a benchmark for mortgage rates. As a result, both Canadian and US mortgage rates have climbed, with experts cautioning that continued instability could keep rates elevated for the foreseeable future. Toronto Star+2

🏠 Housing Market Slowdown and Borrower Impact

The rise in mortgage rates has had a tangible effect on housing markets. In the US, mortgage applications have dropped by 11%, and areas such as Los Angeles’ Encino neighborhood are experiencing slower home sales. The average monthly payment for a $1 million loan now stands at approximately $6,242, increasing the financial burden on prospective buyers during a traditionally busy season. Bloomberg+2

🏦 Policy and Economic Outlook

Despite rising mortgage rates, the Federal Reserve has maintained its benchmark rate at 3.5-3.75% amid economic uncertainty. Organizations like Freddie Mac have highlighted the risk that elevated rates pose to housing market recovery. Analysts suggest that unless inflation and geopolitical risks subside, mortgage rates are likely to remain high, potentially dampening both home purchasing and refinancing activities in the months ahead. China.org+2

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