The Bank of Canada on Wednesday decided to hold its benchmark interest rate steady, a move that could affect homeowners and prospective buyers across the country.
According to a recent Royal LePage report, 1.2 million mortgages will be up for renewal in Canada this year.
Royal LePage CEO Phil Soper told Global News that the Bank of Canada’s decision to hold interest rates at 2.75 per cent on Wednesday pumped the brakes on a cycle of declining interest rates.
“We’re in a period of declining interest rates, but as the Bank of Canada decision today to hold things steady showed, we’re near the end of that period,” he said.
Soper said for the foreseeable future, Canadians can expect stability in mortgage prices.
“We’ve had a year of steady, sometimes rapid, moving of interest rates down the ladder, we’ve reached that approximate time where interest rates are going to settle out,” he said.
What the rate hold means for mortgages
Penelope Graham, mortgage expert at Ratehub.ca, said Wednesday’s decision would not change what you pay for your mortgage.
“What this essentially means for borrowers is that there’s no rate relief immediately on the horizon. For a variable mortgage rate holder, this means that your payment or the amount of your payment that goes towards interest is not going to change. It means that there are no immediate discounts for this borrower group,” she said.
Clay Jarvis, financial expert at NerdWallet Canada, said, “I don’t think it (a rate cut) would have helped Canadians afford a home. When a rate cut does come through, it really only affects variable mortgage rates, which are still higher than fixed rates.
“So, if you couldn’t qualify for a four per cent mortgage yesterday, you’re not going to be able to qualify for one today.”
However, the rate hold comes after seven consecutive rate cuts by the central bank. The Bank of Canada has consistently dropped interest rates since June last year, from five per cent to 2.75 per cent.
Get breaking National news
For news impacting Canada and around the world, sign up for breaking news alerts delivered directly to you when they happen.
Jarvis said this could be a good time to shop if you’re one of the 1.2 million people looking to renew their mortgage this year.
“It’s a lot easier to shop for mortgages and compare rates this year because you don’t have to necessarily go through a stress test. If your mortgage is coming up for renewal, tag in a mortgage broker and get them to compare some rates for you because banks right now are pretty desperate for business,” he said.
Graham said whether a fixed rate mortgage or a variable rate mortgage is right for you depends on whether or not you can ride out the economic uncertainty created by U.S. President Donald Trump’s tariffs.
“It really depends on your risk tolerance,” she said.
“Variable mortgage rates are pretty competitive right now. The lowest in Canada is still at 3.95 per cent. That’s quite a narrow spread with the lowest fixed rate that’s available. Those are as low as 3.79 per cent.”
Graham added, “If you feel very bullish that variable mortgage rates are going to continue to go down, then it might make sense for you as long as you can withstand any increases to your payments.”
While some experts do expect a slight rate cut later this year, Graham cautioned borrowers to assess their own financial situation.
“That tariff narrative can change on a dime and we can see a very different response from the Bank of Canada,” she said.
The Bank of Canada’s decision to hold the interest rate might come as a disappointment to some prospective homebuyers waiting to jump into the market.
However, Soper said most homebuyers are reluctant because of economic uncertainty.
“Our research shows it’s not the cost of borrowing that’s keeping people on the sidelines (of Canada’s housing market),” Soper said.
“People are on the sidelines because of uncertainty. It’s the same reason that CEOs aren’t investing in plants and equipment in the United States, Canada, or elsewhere in the world right now. Uncertainty is not a time in which people feel comfortable making major decisions.”
Home sales fell across Canada in March, with uncertainty Trump’s tariffs causing prices and demand to plummet, the Canadian Real Estate Association (CREA) said Tuesday.
The sale of homes fell 9.3 per cent in March compared with this time last year.
Compared with last month, Canada recorded a drop of 4.8 per cent in home sales. National home sales are down 20 per cent compared with November 2024.
The national average home price in Canada was $678,331 in March 2025, down 3.7 per cent from March 2024.
Jarvis said for anyone who can afford the risk of jumping into the market right now, there are some gains to be made.
“There’s inventory piling up, so if you are a buyer you’re not necessarily going have to deal with the kind of competition that would drive prices higher,” he said.
Jarvis added that first-time homebuyers could find opportunity in the condo market.
“If you’re looking for a bargain, the condo market is where to look right now. Demand is really low. A lot of new inventories are hitting the market and developers and real estate agents are really trying to offload these things,” he said.
He added, “Condos are ice cold. You can find a one bedroom. You can find two and three bedrooms. But as you scale up the size of your property, just know that you’re going to be paying a higher maintenance fees every month.”
© 2025 Global News, a division of Corus Entertainment Inc.
