A grounded read on where rates sit, what has actually changed since last year, and how the math shakes out for buyers in greater Fredericton at today's prices.
Five-year fixed rates from the major Canadian lenders are sitting in the high 4s as of April 2026, with the best-qualified borrowers picking up offers a touch lower through brokers. Variable rates, after the Bank of Canada's recent moves, are running a quarter to a half point above five-year fixed. That gap has buyers pausing to think harder about the term decision than they did when fixed and variable were closer.
This time last year the qualifying rate was squeezing a lot of marginal buyers out of price points they could otherwise afford. Stress test math has not changed, but the rates we are stress-testing against are slightly friendlier now. The same household income that qualified for a $385,000 home a year ago is qualifying for $415,000 to $425,000 this spring, depending on the lender and the down payment.
Fredericton home prices over the same period are up about three percent. So the buyer is netting a small affordability gain, not a huge one, but enough that some folks who pressed pause last year are coming back to the table.
Take a $415,000 home, twenty percent down, $332,000 mortgage, twenty-five year amortization, five-year fixed at 4.79 percent. Monthly principal and interest lands around $1,895. Add property tax of roughly $345 a month for a typical greater Fredericton assessment, $130 for heat in winter, $90 for insurance, and you are at about $2,460 all-in.
For a household earning $115,000 combined gross, that is right at the edge of the standard 32 percent gross debt service ratio. Comfortable, not stretched. A year ago that same household would have been looking at a $380,000 home to hit the same ratio.
The case for a five-year fixed in this market is stability. You lock in your number for the full term, and if rates drop meaningfully in 18 to 24 months, you can break and re-fix at a known penalty cost. Most of my buyers in 2026 are choosing this path.
The case for a three-year fixed is that if you genuinely believe rates will be 75 to 100 basis points lower in 2029, you avoid a big break penalty by simply renewing into a better rate. The risk is rates stay flat or move up, and you renew at a worse number than you would have locked in today.
The case for variable at current spreads is honestly hard to make for most household buyers right now. The rate is higher today and the savings only materialize if the Bank of Canada cuts faster than the bond market is currently pricing in. Investors with longer holding periods sometimes still prefer variable for the prepayment flexibility, but for first-time and move-up buyers the predictability of fixed usually wins.
Get pre-approved with a broker, not a single bank. The spread between the best advertised rate and the best actually-available rate can be 15 to 25 basis points. On a $350,000 mortgage over five years, that is real money. I have a short list of New Brunswick brokers I trust who will shop the same application across multiple lenders.
Run your number with a buffer. Whatever monthly payment makes the bank's math work, knock five percent off it for your actual household budget. Property tax reassessments, heat bills in a January cold snap, an unexpected oil tank replacement, none of these show up on the lender's affordability calculation. Build the cushion in.