Understanding the Bank of Canada’s Latest Interest Rate Decision
On January 28, 2026, the Bank of Canada (BoC) decided to hold its key interest rate at 2.25% — the same level it’s been at since late 2025. This decision was widely expected by experts and reflects continued uncertainty in the Canadian economy.
Here’s what this means for homeowners, buyers, and anyone watching the mortgage market.
Why the Bank Held Rates Steady
The Bank’s main job is to keep inflation close to its target of about 2% — meaning prices don’t rise or fall too quickly. Inflation in Canada has been close to that goal, and recent economic data didn’t give the Bank a strong reason to change rates.
At the same time, uncertainty in global and U.S. trade policies — especially around tariffs and the Canada-U.S.-Mexico trade agreement — makes it harder for economists to predict where the economy is heading. This uncertainty contributed to the Bank’s decision to keep rates where they are.
How This Affects Ottawa Home Buyers and Mortgage Holders
👉 Mortgage Rates for Variable Loans
For people with variable-rate mortgages or home equity lines of credit (HELOCs), the Bank’s decision to hold the rate means those costs shouldn’t increase right now. Variable rates are tied to the Bank’s overnight rate, so a stable policy rate gives some breathing room for monthly payments.
👉 Fixed-Rate Mortgage Renewals and New Loans
Fixed mortgage rates are influenced indirectly by long-term market expectations. While holding the policy rate doesn’t change fixed mortgage costs immediately, it supports stable borrowing costs in the medium term.
👉 Ottawa’s Housing Market
Steady interest rates can keep demand from dropping sharply — helping buyers feel confident about borrowing — but they also don’t dramatically lower monthly mortgage costs. That means affordability still matters in decisions to buy, renew, or refinance.
What Comes Next?
The Bank’s next rate announcement is scheduled for March 18, 2026. Analysts expect the BoC to remain cautious — adjusting only if inflation significantly shifts or the economy changes direction.
For anyone thinking about buying or refinancing in Ottawa, understanding these rate dynamics helps plan wisely and choose the best mortgage strategy.
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!
