Why I Bought During the 2025 Volatility and What That Has To Do With Last Week’s Rate Drop

February 26, 2026

In April 2025, when tariff headlines were everywhere and markets were sliding, I bought shares in a major Canadian bank.

Not because I thought I had timed the bottom.
Not because I knew what would happen next.
But because I was allocating capital I could leave alone for 20 years.

Could it have dropped further. Absolutely.
Would I have looked foolish in the short term. Possibly.

But I was not making a six month decision. I was making a long term one.

That is the lens I think people should use when they read about last week’s mortgage rate drop.

What This Covers

• What actually changed with mortgage rates

• Why volume matters more than price right now

• How most buyers are likely to misread this signal

• The current setup of inventory, pricing, and rates

• Resale versus presale and how to think about each

If none of that is relevant to you, stop here.
If it is, keep reading.

What Actually Changed

Here are the numbers.

5 Year Fixed insured: 3.89%
3 Year Fixed insured: 3.79%
5 Year Variable insured: 3.50%

Most 4 and 5 year fixed terms fell between 0.10% and 0.15%
Some 3 year terms dropped as much as 0.20%

The broader lender view is that we are likely near a rate low. Rates staying this low three years from now is considered unlikely. From a pure rate strategy standpoint, the 5 year fixed is currently favoured over the 3 year unless someone strongly believes rates will be lower at renewal.

That is the update.

The more interesting question is what it could mean.

Price Gets Attention. Volume Decides Direction.

If transactions do not increase, pricing is a moot point because markets stabilize through participation first and appreciation tends to follow later.

Lower fixed rates do not automatically push prices higher, but they can reduce hesitation. When financing feels more predictable, some buyers step back in and activity begins to build.

Volume tends to lead, and price reacts later. If absorption improves into the spring or fall cycles, that will matter more than any headline about benchmark values.

How This Will Probably Be Interpreted

Here is the psychology.

Many buyers will see rates dropping and assume it signals more weakness ahead, that rates are being cut because something is deteriorating. Mortgage rates do not work that way. They move based on bond markets and lender competition, not as a direct vote on housing values. But perception drives behaviour, and what usually follows is fairly predictable.

Rates drop, buyers pause because they expect further weakness, absorption improves quietly in the background, and then the first meaningful rate increase is what actually pulls people off the fence. Rate increases tend to move people more than rate decreases.

If lenders are correct and we are near a cyclical floor, the real pressure point may not be today’s drop. It may be the first meaningful increase. That does not mean rush. It means understand the order of events.

The Setup Right Now

We currently have a combination of higher inventory in many segments, softer pricing relative to peak levels, and five year fixed rates that are low in a longer term context. That combination can represent opportunity, even if it does not feel like one.

Most buyers will not treat it that way. Many will interpret lower rates as confirmation that conditions are deteriorating and will choose to wait. If volume begins to build while rates remain stable, the window narrows quietly because the shift happens gradually, not all at once.

Resale and Presale Are Different Conversations

Resale buyers are financing today, while presale buyers are completing in the future, which makes them different decisions even if they sit in the same market.

Projects launching today are priced in today’s market reality. If the math does not work for a developer, the project does not launch. It gets paused or sold. That means new product coming to market today is not built on peak cycle assumptions.

Some buyers choose presale because they need time, whether that is time to accumulate more equity, time for life to align, or time to stage deposits instead of taking on full financing immediately. In some cases, the product simply does not exist in current resale inventory.

Other buyers value flexibility and certainty today, and resale serves that better. Neither path is automatically superior because they solve different problems depending on the buyer.

The Only Question That Actually Matters

You cannot perfectly time markets, so the real decision is whether you can hold through cycles and whether the purchase makes sense beyond the next year or two.

If you are buying something you can comfortably own for the long term, short term volatility becomes background noise. If you are stretching or speculating, timing becomes far more important and sensitivity to rate changes increases.

Last week’s rate drop does not guarantee a rebound, and it does not predict a decline either. It shifts conditions slightly toward stability, but the outcome still depends on participation and confidence.

The real question is whether your decision works under multiple reasonable scenarios. If you want to walk through those scenarios, I am always open to that conversation.

Now that you understand the “why” behind long-term buying, see how the latest local data reflects these trends in real-time.