No Change From the Bank of Canada

July 30, 2025

The Bank of Canada announced this morning that it is maintaining its overnight policy rate at 2.75%, the same level it has been since March. This is the third meeting in a row that the Bank of Canada left rates unchanged. 

The Bank said that "with still high uncertainty, the Canadian economy showing some resilience, and ongoing pressures on underlying inflation, that they decided to hold the policy rate unchanged." Despite tariff disruptions, the Canadian economy has not shown significant signs of weakness.

The Bank indicated what it may take for further rate cuts to occur - "If a weakening economy puts further downward pressure on inflation and the upward price pressures from the trade disruptions are contained, there may be a need for a reduction in the policy interest rate."

The prime rate and variable mortgage rates will remain unchanged. The difference between variable and fixed mortgage rates is now small but most variable rates remain a bit higher. Most mortgage borrowers continue to prefer safety, eschewing interest rate risk and choosing fixed rates.

Bond yields are higher over the past couple weeks, forcing fixed mortgage rates higher. Since the last rate decision on June 4th, 5yr Bond yields are higher by 0.20%. All A-lenders have recently increased their fixed mortgage rates as a result. This recent increase in fixed mortgage rates highlights the importance of getting a mortgage pre-approval to protect yourself against the potential for higher rates. Economic news and the outcome of the ever-changing tariff debate will have more impact on fixed rates than the Bank of Canada. 

Looking forward, the Bank of Canada stated they are "proceeding carefully, with particular attention to the risks and uncertainties facing the Canadian economy." They are taking a very cautious approach and it appears that, absent any data that tells them otherwise, they are content to hold rates where they are for the near term.

The housing market in some major centres is now a buyer's market and those that can afford to buy in this environment can take advantage. Current mortgage holders should run the numbers and see if refinancing at lower rates make sense. Whatever your situation, talk to us at Frank Mortgage to discover your best options.

The prime rate at the banks remains at 4.95%.

You can read the Bank of Canada's full press release here - 

https://www.bankofcanada.ca/2025/07/fad-press-release-2025-07-30/

The next Bank of Canada rate announcement is scheduled for Sept 17th.

Curious what your best mortgage rate could be today?

Do you have questions about a new mortgage, renewal or refinancing?