The Bank of Canada kept its overnight rate unchanged on December 10, holding steady after back-to-back cuts earlier this fall. For homeowners, buyers, and anyone renewing in the next year, this pause brings a moment of stability in a market that’s seen a lot of movement.
Why the Bank Paused
The Bank noted that the economy is showing stronger-than-expected resilience. Recent data — stronger GDP numbers, firmer job markets, and steady consumer spending — suggest that Canada is holding its ground despite global uncertainty.
At the same time, inflation remains within the Bank’s target range, easing pressure for another rate hike. The combination of cooling inflation and steady economic performance gives the Bank room to hold rates where they are for now.
Still, the Bank emphasized that risks remain. Global trade disruptions, mixed domestic demand, and geopolitical uncertainty mean the Bank is watching conditions closely before making any next move.
What This Means for Variable-Rate Borrowers
With the overnight rate staying put, variable-rate mortgage holders will see no immediate change to their payments. Prime rate should remain stable, offering short-term predictability after a volatile year.
What This Means for Fixed-Rate Borrowers
Fixed mortgage rates are guided by bond yields, not the Bank of Canada directly — and yields have been rising. That means:
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Fixed rates are likely to remain elevated heading into early 2026.
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Anyone renewing soon should start reviewing options early to avoid surprises.
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A rate hold can offer protection if yields push fixed rates higher.
Is This the Bottom?
Not necessarily. The Bank’s tone was neutral — signalling that current rates feel “appropriate,” but leaving the door open for future changes if the economy strengthens or inflation drifts. This means borrowers shouldn’t assume that today’s rates are the lowest we’ll see for a while.
What We’re Telling Clients
At TopRankinMortgages, we’re encouraging clients to:
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Review renewal options early, especially if you’re within 120 days.
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Consider a rate hold if you expect to buy or refinance soon.
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Stay flexible — economic conditions may shift in 2026, and the right mortgage strategy today may not be the same six months from now.
Need Clarity on Your Options?
If you’re buying, renewing, or planning ahead for the new year, we’re here to walk you through the best strategy based on your budget and goals.
TopRankinMortgages
Here to help you stay one step ahead.
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!
