The Globe and Mail reports in its Friday edition that the Middle East conflict is disrupting what was expected to be a stable year for fixed- and variable-rate mortgages. The Globe's Salmaan Farooqui writes that bond yields have shot up since the conflict with Iran began, and markets are now pricing in the expectation of a Bank of Canada rate hike by the end of 2026. Rates.ca's Victor Tran says some lenders he works with have already raised their fixed rates by 10 to 15 basis points, and further increases could be coming if the war continues. The central issue around the Middle East conflict is inflation. Oil shipments have screeched to a halt in the Persian Gulf, and energy prices have skyrocketed as a result. The Canada five-year bond neared the 3.1-per-cent mark on Thursday afternoon, after it bottomed out around 2.7 per cent before the war started. The BOC would need to increase interest rates if inflation were to rise, leading to higher variable-rate mortgage payments. There is some good news. CIBC's Benjamin Tal says he expects the U.S. will back off from the Iran conflict in the short term. He says a swift end would bring mortgage markets back in line to their stagnant prewar trajectory in a matter of weeks.