Markets expect another one or two 25 basis point cuts in 2025, but for now, the Bank of Canada is holding interest rates steady.Christinne Muschi/The Canadian Press
The Bank of Canada’s decision to hold the headline interest rates steady at 2.75 per cent yesterday is bad news for variable rate mortgage holders. It’s worse news when you consider that the Bank of Canada’s concerns about pesky inflation could lead it to hold rates again.
The BoC highlighted that consumers are expecting inflation as a result of U.S. President Donald Trump’s global trade war. Businesses have also indicated that they’ll raise prices in response to these tariffs.
“So what the bank is signalling is that they expect hotter inflation to come and it’s not a recipe for any kind of big rate cuts going forward,” said Shaun Cathcart, senior economist with the Canadian Real Estate Association, in an interview after the BoC’s rate announcement.
Markets still expect another one or two 25 basis point cuts in 2025 (A basis point is 1/100th of a percentage point).
But in the meantime, variable mortgage rates are still slightly higher than 5-year fixed mortgage rates, making it a tricky time for anyone to choose between a variable or fixed mortgage.
Mortgage rates are sourced by Ratehub.ca. For a comprehensive list of today’s mortgage rates for each term/type, visit ratehub.ca/best-mortgage-rates.
Ratehub.ca is a mortgage-rate comparison marketplace and mortgage brokerage. It helps millions of Canadians compare and obtain the best mortgage rates, credit cards, insurance, deposits and loan products.
Rates shown are the lowest available for each term/type and category (insured versus uninsured) as of market close on June 5.
