US mortgage rates just hit 7.49%, the highest in three years!

US mortgage rates just hit their highest level in three years. The average 30 year fixed rate climbed to 7.49%, up 0.19 points in a single week, while the US 10 year Treasury yield reached 5.3%, a 24 year high, and the 30 year touched 5.7%. The main drivers are higher oil prices from the Iran conflict, inflation at 3.4%, and a Fed rate hike in September. The impact is already showing up in the market, with US mortgage applications at their lowest level since February 2025 as buyers step back. For Canadian borrowers, this matters because our fixed rates follow bond yields, which often move with US yields.

Canadian fixed mortgage rates are tied to Canadian bond yields, and those usually move in the same direction as US yields. If you are shopping for a fixed rate, expect upward pressure even though the Bank of Canada has not made the same move.

Not looking too bright for home owners in the short run!

Source: https://www.aljazeera.com/economy/2026/10/7/us-mortgage-rates-hit-their-highest-level-in-three-years