A potential U.S.-Canada trade deal could impact future Bank of Canada rate decisions and the direction of variable mortgage rates.David Zalubowski/The Associated Press
Will there be any more interest rate cuts from the Bank of Canada this year? At least one major Canadian bank thinks the answer is no.
A Royal Bank of Canada report last month from RBC Economics says it’s now forecasting no further cutting from the central bank in light of inflation concerns and the Canadian economy’s resilience during the U.S. trade war. It’s bad news for variable mortgage holders who may have been banking on some discounts this year.
Not all economists agree with RBC, with other institutions such as Bank of Montreal forecasting as many as three rate cuts in 2025. But Robert Kavcic, senior economist at BMO Economics, has also said that a trade deal between Canada and the U.S. that puts a stop to tariffs could indeed prompt the Bank of Canada to hold rates for the rest of the year.
The U.S. and Canadian governments have given themselves a July 21 deadline to reach a trade deal, and talks have been rocky along the way. Until we know more about the nature of a possible deal, there is a lot of uncertainty in the direction of variable mortgage rates.
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 July 10.
