The Bank of Canada is widely expected to leave interest rates unchanged at 2.25 per cent when it convenes next week, as the central bank navigates diverging economic trends.
The BoC faces a sluggish economy that would call for a rate cut, while continuing inflation risks may require an interest-rate hike, said Clay Jarvis, a mortgage and financial expert with NerdWallet Canada.
“The opposing nature of Canada’s current economic maladies explains why the bank’s likely to continue holding the overnight rate on July 15,” Mr. Jarvis said.
“Treating one condition could exacerbate the other, so it looks like the bank will go the ‘do no harm’ route and maintain the overnight rate.”
The BoC interest rate has remained unchanged since October, when the bank delivered a quarter-point rate cut. Variable-rate mortgages, which are directly influenced by monetary policy, have remained stable during that period.
Bond swaps markets, which capture investor sentiment around monetary policy, have largely priced in expectations of a rate hold next week, according to Bloomberg data. However, investors are predicting that a rate hike could be in store before the end of the year.
Meanwhile, long-term fixed mortgage rates have hovered around the 4-per-cent mark since the conflict in Iran began. The war and its ensuing impact on oil prices put upward pressure on bond yields, which in turn made fixed mortgages more expensive.
Jamie David, senior director of mortgages at Ratehub.ca, said competition has recently warmed up somewhat among lenders on fixed rates, and many terms are now offered with rates just below 4 per cent.
“These are the most competitive fixed rates borrowers have seen since March, 2026,” Mr. David said.
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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 Thursday.
