If you’ve been waiting for interest rates to drop, this morning’s announcement from the Bank of Canada probably felt like a bit of a pause button.
I’m Josh Tagg, a mortgage broker here in Ottawa, and I want to go over what’s actually happening and what it means for your mortgage, whether you’re buying, renewing, or just trying to make sense of the market.
The Bank of Canada is Holding at 2.25%
The Bank of Canada decided to hold its overnight rate at 2.25%. That means no immediate change to variable mortgage rates or HELOCs.
But the real story isn’t just the hold. It’s why they’re holding.
Right now, the economy is sending mixed signals. On one side, things are slowing down. Canada’s economy actually shrank in the last quarter of 2025. Job gains we saw late last year have reversed, and unemployment has climbed to 6.7%. Inflation has also cooled to around 1.8%, which is below the Bank’s 2% target.
Normally, that kind of data would push the Bank toward cutting rates. But there’s another side to the story.
Why Rates Didn’t Drop
Global events are complicating things. Rising tensions in the Middle East have pushed oil and gas prices higher. That matters a lot here in Ontario, but it also affects inflation across the country. Higher energy prices tend to ripple through everything, from transportation to groceries.
At the same time, global bond yields have been volatile, stock markets have pulled back, and supply chains are under pressure again.
So now the Bank of Canada is dealing with two competing forces:
- A weaker economy that would normally justify rate cuts
- Rising inflation risks driven by global energy prices
They’re essentially waiting to see which direction wins.
What This Means for Your Mortgage
This is where it becomes very real for you.
If you have a variable rate mortgage or a HELOC, nothing changes today. Your rate and your payment stay the same for now.
If you’re watching fixed rates, it’s a bit more complicated. Fixed rates are tied to bond yields, and those have been moving around a lot. That means fixed rates could still rise or fall even though the Bank of Canada didn’t move.
In other words, just because the Bank held rates doesn’t mean fixed rates are stable.
What I’m Seeing Here in Ontario
Here on the ground, we’re already seeing the market react.
Home prices and sales softened again last month. Buyers are cautious. Many are waiting for clarity on rates before making a move.
At the same time, Alberta’s economy is always closely tied to energy. Rising oil prices can support jobs and incomes here, even while creating inflation pressure nationally.
That creates a bit of a unique situation for Ottawa buyers. The local economy can feel stronger than the national headlines suggest, but borrowing costs are still influenced by global factors.
Should You Wait or Act?
This is the question I’m getting every day. And the honest answer is that it depends on your situation.
If you’re looking for an announcement that rates are definitely dropping, you might be waiting longer than expected. The Bank has made it clear they’re watching closely, and they’re ready to act, but nothing is guaranteed in the short term.
If you’re buying, this kind of uncertainty can actually create opportunity. Less competition, softer prices, and more negotiating power.
If you’re renewing, this is a critical time to review your options. Don’t just sign your renewal and hope for the best. There are strategies we can use to manage risk, whether that’s choosing the right term or structuring flexibility into your mortgage.
My Take as a Mortgage Broker
Right now, we’re in a “wait and watch” phase.
The Bank of Canada is trying to balance a slowing economy with rising inflation risks. That’s not an easy position, and it means we could see changes in either direction depending on how things evolve over the next few months.
For you, the key is not trying to time the market perfectly. It’s making a smart, informed decision based on your goals, your budget, and your comfort with risk.
That’s where I come in.
If you’re unsure what to do next, whether you’re buying your first home, moving up, or renewing your mortgage, I’m happy to walk you through your options so you can make a confident decision. Because in a market like this, clarity is everything.
