Renewing your mortgage? What Bank of Canada’s rate hold means for you – National

The Bank of Canada decided to keep its benchmark interest rate steady on Wednesday, a move that could impact homeowners and potential buyers across the country.

According to a recent report from Royal LePage, 1.2 million mortgages are set to be renewed in Canada this year.

CEO of Royal LePage, Phil Soper, stated to Global News that the Bank of Canada’s decision to maintain interest rates at 2.75 per cent signals a halt to the trend of declining interest rates.

Soper mentioned, “We’ve experienced a period of decreasing interest rates, but the decision today by the Bank of Canada to keep things stable indicates that we are approaching the end of that period.”

He further added that Canadians can anticipate stability in mortgage rates for the foreseeable future.

Soper explained, “After a year of consistent movement of interest rates downwards, we have now reached a point where interest rates are expected to level off.”

Penelope Graham, a mortgage expert at Ratehub.ca, stated that the decision made on Wednesday would not impact what borrowers pay for their mortgages.

Graham explained, “For borrowers, this means that there won’t be an immediate relief in rates. For those with variable mortgage rates, this implies that their payments or the portion of their payment allocated to interest will remain unchanged. There are no immediate discounts for this group of borrowers.”

Financial expert Clay Jarvis from NerdWallet Canada added, “I don’t think it (a rate cut) would have helped Canadians afford a home. When a rate cut occurs, it mainly affects variable mortgage rates, which are still higher than fixed rates.”

He continued, “So, if you couldn’t qualify for a four per cent mortgage yesterday, you won’t qualify for one today.”

However, the decision to maintain the interest rate comes after seven consecutive rate cuts by the central bank. The Bank of Canada has steadily reduced interest rates since June of last year, from five per cent to 2.75 per cent.

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Jarvis suggested that this could be a good opportunity for the 1.2 million individuals looking to renew their mortgages this year to explore their options.

He mentioned, “It’s a favorable time to compare mortgage rates and shop around this year as you won’t necessarily have to undergo a stress test. If your mortgage is due for renewal, involve a mortgage broker to compare rates because banks are currently eager for business.”

Graham pointed out that the choice between a fixed-rate mortgage and a variable-rate mortgage depends on an individual’s ability to withstand the economic uncertainties resulting from U.S. President Donald Trump’s tariffs.

She emphasized, “It really depends on your risk tolerance. Variable mortgage rates are quite competitive currently, with the lowest rate in Canada at 3.95 per cent. This is a narrow gap compared to the lowest available fixed rate, which stands at 3.79 per cent.”

Graham added, “If you believe that variable mortgage rates will continue to decrease, it might be a suitable option for you as long as you can handle any potential increases in payments.”

While some experts anticipate a minor rate cut later in the year, Graham advised borrowers to evaluate their own financial circumstances.

She warned, “The tariff narrative can change rapidly, and we could witness a different response from the Bank of Canada.”

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The decision by the Bank of Canada to maintain the interest rate may disappoint some potential homebuyers eager to enter the market.

However, Soper mentioned that most homebuyers are hesitant due to economic uncertainty.

He stated, “Our research indicates that it’s not the cost of borrowing that’s preventing people from participating in Canada’s housing market.”

He continued, “People are staying on the sidelines due to uncertainty. This is the same reason why CEOs are hesitant to invest in plants and equipment in the United States, Canada, or other parts of the world at the moment. Uncertainty is not conducive to making major decisions.”

Home sales decreased across Canada in March, with Trump’s tariffs leading to a decline in prices and demand, as reported by the Canadian Real Estate Association (CREA) on Tuesday.

Home sales dropped by 9.3 per cent in March compared to the same period last year.

Compared to the previous month, Canada witnessed a 4.8 per cent decrease in home sales. Nationwide home sales are down by 20 per cent compared to November 2024.

The average home price in Canada was $678,331 in March 2025, showing a 3.7 per cent decrease from March 2024.

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Jarvis suggested that for those willing to take the risk of entering the market now, there are potential benefits to be gained.

He mentioned, “There’s a surplus of inventory, so buyers won’t have to deal with intense competition that typically drives prices up.”

Jarvis also highlighted that first-time homebuyers might find opportunities in the condo market.

He advised, “If you’re searching for a deal, the condo market is the place to explore currently. Demand is low, and there’s a lot of new inventory entering the market with developers and real estate agents eager to sell these properties.”

He added, “Condos are experiencing a slowdown. You can find one-bedroom, two-bedroom, and three-bedroom units. However, as you move up in size, be prepared for higher monthly maintenance fees.”

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