Bank of Canada Rate Announcement

Bank of Canada Holds Rate at 2.25%: What It Means for Homebuyers and Sellers

The Bank of Canada closed out 2025 by keeping its key interest rate at 2.25%, a move widely expected by economists. Governor Tiff Macklem noted that the current rate is positioned to support the economy through a “structural transition” while keeping inflation near the 2% target. For the real estate market, this stability offers a degree of predictability as we head into the new year.

While uncertainty remains high—the bank expects inflation to stay close to 2% in 2026, even with some short-term volatility. GDP growth is projected to average around 1.4% through 2026 and 2027, suggesting a slow but steady economic environment. For homeowners and investors, this points to relatively stable borrowing conditions over the next few months.

The federal government’s recent budget, which includes $280 billion in infrastructure, productivity, security, and housing investments, is also expected to support long-term economic growth. However, the full effect of this spending will take time to show up in the housing market. With the central bank having already cut rates by 100 basis points since early 2025, many buyers may continue to feel cautiously optimistic heading into 2026.

The next rate announcement is scheduled for January 28.