The Bank of Canada (BoC) announced this morning that it is holding its overnight policy rate at 2.75%. As a result, most lenders’ prime lending rate will remain at 4.95%. This marks a pause in what had been a steady trend of rate cuts earlier this year.
Why the Pause?
While inflation is easing—down to 2.3% in March—the BoC is proceeding with caution. Trade tensions between the U.S. and Canada continue to fuel uncertainty, and with a federal election just two weeks away, the central bank may be holding back from any bold policy moves until the political landscape becomes clearer.
Recent Trends to Know:
- Home sales fell 4.8% last month, and are down 20% from their November 2024 peak
- Employment declined in March, while wage growth is softening
- Tariff-driven cost pressures may threaten future inflation control
What This Means for You
- Have an adjustable-rate mortgage or HELOC? No change to your monthly payment—for now. But more cuts may come later this year.
- On a fixed-rate mortgage? This decision doesn’t directly impact your rate, but longer-term trends could shift lender pricing.
- Buying, refinancing, or renewing this year? The BoC may resume rate cuts after the election period, with many major banks forecasting an overnight rate of 2.0–2.25% by year-end.
If you’re wondering whether to act now or wait for more rate movement, I’m here to help you make the right call for your situation.
Book a time to talk to Lisa! www.chatwithlisareynolds.ca
