As the Bank of Canada prepares for its final interest rate announcement of the year next week, most experts agree we’re headed for a rate hold. The overnight lending rate is expected to remain at 2.25%, signalling the end of the Bank’s cutting cycle for now.
But while variable rates may remain stable, new pressure is building on fixed mortgage rates—and it’s something Canadians should keep a close eye on.
Why a Rate Hold Is Expected
Economists point to mixed economic signals as the main reason the Bank of Canada is likely to pause:
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A cooling job market
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Ongoing uncertainty around U.S. trade
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Stronger-than-expected GDP numbers
According to Shannon Terrell of NerdWallet, “a rate hold is the only move that makes sense in response to recent opposing economic forces.” In short, the Bank doesn’t have enough reason to cut again—and plenty of reason to wait.
Variable Rates Hit Their Lowest Level Since 2022
With the overnight rate steady, variable-rate mortgages have benefited the most. Ratehub data shows the lowest variable options sitting around 3.45%, offering relief for shoppers who favour flexibility.
But the bigger story right now isn’t variable — it’s fixed.
Why Fixed Rates Could Start Climbing
Fixed mortgage rates are tied directly to the bond market, especially the five-year Government of Canada bond yield. Recently, that yield has climbed to 2.8%, and experts warn that continued increases will push fixed mortgage rates higher.
When bond yields rise, fixed rates follow — often quickly.
That’s why, even with the Bank of Canada holding steady, the fixed-rate environment is showing signs of shifting upward.
Why Rate Holds Matter More Than Ever
Many lenders allow homebuyers and those renewing to hold a mortgage rate for up to 120 days. With growing pressure on fixed rates, locking in a rate today could offer meaningful protection against future increases.
Experts are encouraging Canadians not to wait.
What This Means for Homebuyers and Renewals
If you’re:
Buying in the next few months:
A rate hold could save you money if fixed rates rise.
Renewing soon:
This is an especially important moment to explore your options. Fixed rates have been volatile, and renewal shocks are still very real for many Canadians.
Considering variable vs fixed:
Variable remains attractive in the short term, but understanding your full financial picture is key.
At TopRankinMortgages, we help clients navigate the market with clarity and confidence, especially in moments like this when trends shift quickly.
Need Guidance?
If you’re planning to buy, refinance, or renew, now is the time to talk. We’ll walk you through your options, compare rates across lenders, and help you lock in a strategy that protects your budget.
Reach out today — even a quick conversation could save you thousands.
At TopRankinMortgages, we help you navigate this steady (and familiar) market with clarity and confidence. No stress, no pressure—just smart mortgage guidance when you need it.
Have questions about how this affects your mortgage? Let’s chat!
