How the War in Iran Is Driving Up Your Mortgage Rate and Cost of Living in Canada

https://www.youtube.com/watch?v=Hk4FPAZo8aE

Most Canadians look at what's happening in Iran and think "that's a world away from me." But if you have a mortgage, or you're trying to get one, that conflict is showing up in your finances right now. And most people have no idea.

I sat down with mortgage broker Dion Beg this week, and what he shared is something every Canadian homeowner and buyer needs to hear.

The Bank of Canada Held Rates. So Why Is My Mortgage Going Up?

On the surface, the news looked fine. The Bank of Canada held its rate right where it was. If you have a variable rate mortgage, nothing changed for you today.

But here's what most people don't understand, variable rates and fixed rates are driven by completely different things.

Variable rates look backwards. The Bank of Canada makes decisions based on economic data from the last one to two months, data that was actually collected three to four months ago. It's a slow-moving machine by design.

Fixed rates look forward. They're tied to bond yields, and bond yields react to what the market thinks the future looks like. Right now, the market is watching Iran. And it's nervous.

The Iran-to-Grocery-Store Connection Nobody Is Talking About

Here's how Dion explained it, and it's as simple as it gets:

If it ends up on a truck, it takes gas to get to you.

War in Iran threatens oil supply. Oil supply drives up the price of gas. Gas drives up the cost of transporting everything, food, materials, goods. When the cost of everything goes up, inflation goes up. When inflation expectations go up, bond yields go up. When bond yields go up, fixed mortgage rates go up.

That's exactly what we're seeing right now. Fixed rates have jumped 20 to 40 basis points depending on the lender. Rates that were sitting at 3.99% are now pushing 4.20%, 4.40% or higher.

A barrel of oil halfway around the world just made your mortgage more expensive. That's the world we live in.

The Self-Employed Mortgage Problem Nobody Prepares You For

Beyond the rate conversation, Dion brought up something that hits close to home for a lot of realtors, entrepreneurs, and commission-based professionals listening to this podcast.

Getting a mortgage when you're self-employed is a completely different game — and most people find out too late.

Dion shared the story of his client Hector. Hector had lost out on a property he loved because the mortgage broker he was working with couldn't get him approved. Within five minutes of reviewing his file, Dion could see why, and knew exactly how to fix it.

Here's the problem: self-employed people often show very different numbers depending on who's looking at their file.

Hector's business brought in close to $300,000. But after his accountant worked through all the expenses, his tax return showed $40,000. A major bank sees $40,000 and says no. But Dion didn't go to a major bank.

B lenders don't care about your tax return. They look at 12 months of your business bank account. Money in, money out, what's left. In Hector's case, $300K came in, $180K went to business expenses, leaving $120K on the application, enough to get approved and buy the property he wanted.

B Lender to A Lender / There's a Path

A lot of people hear "B lender" and panic. Higher rate. Less favourable terms. Dead end. It's not a dead end. It's a bridge.

Dion's other client, Mike, had only been self-employed for one year. Major banks want two years of audited financials before they'll consider your income. Mike didn't have that, but he had strong numbers and a good trajectory.

Dion got Mike approved with a one-year term. Not by accident, by design. By the time that term is up, Mike will have filed his second year of taxes, and Dion is already planning to refinance him into an A lender at better rates and terms.

That's not just mortgage brokering. That's coaching. That's a plan.

If You're Self-Employed, Read This Carefully

This is the part of the conversation I want every realtor, entrepreneur, and commission earner to hear directly from Dion:

"If you think you might want to buy a property in the next two years, the time to talk to me is today — not two years from now."

Why? Because Dion might be able to give you a course correction right now. How you file your taxes this year. How you structure your income showing in your bank account. Small adjustments made today can have an exponentially better outcome when you're ready to buy.

Most people show up at the finish line and wonder why they can't qualify. The ones who win are the ones who had the conversation early.

My Opinion

The Iran conflict isn't staying in the Middle East. It's in your grocery cart, your gas tank, and now your mortgage statement. Most Canadians have no idea how connected these things are, and that gap in understanding is costing people real money.

If you're watching fixed rates and wondering whether to lock in, talk to someone like Dion before you make that call. And if you're self-employed and thinking about buying - don't wait. The earlier you get in front of a broker who actually understands your situation, the better your outcome is going to be.

Connect with Dion Beg 🌐 kangamortgage.ca 📲 Instagram: @thedionbeg

Gary McGowan is the host of RealtyChatter and a national real estate trainer based in British Columbia. New episodes drop weekly at RealtyChatter.com