The Bank of Canada released its final interest rate update of 2025 this morning, and as expected, the benchmark lending rate remains unchanged at 2.25%.
This “rate hold” reflects the Bank’s view that borrowing costs are currently right where they need to be based on how the Canadian economy is performing. Recent economic indicators like GDP, inflation, and employment have shown encouraging signs of stability, which contributed to today’s decision.
Why the Bank Chose to Hold Rates
- Economic data has been improving, including lower inflation and unemployment edging down for the second month in a row.
- After four rate cuts earlier this year (January, March, September, and October), the Bank believes it has reached the “right level” to support both consumers and the broader economy.
- With mixed signals and uncertainty heading into 2026, the Bank is being cautious and keeping policy steady for now.
What This Means for You
A stable overnight rate generally means:
- No immediate changes to variable-rate mortgage payments
- Continued stability across lending products
- A positive signal that inflation is moving closer to the Bank’s 2% target
If you’re planning a renewal, refinance, or future home purchase, this steady environment can help with clearer planning.
Every household’s situation is unique, and I’m always happy to review your mortgage strategy, run a savings comparison, or discuss what this economic outlook could mean for you in 2026.
If you’d like to chat, just send me an email, always happy to help.