This week, the Bank of Canada made its highly anticipated rate announcement—and the short version? Nothing changed. The key interest rate remains the same as it has since March 2025.

For first-time home buyers in Ottawa and Ontario, a steady rate might sound like good news—but there’s more going on beneath the surface. The Bank’s decision to hold rates is tied closely to ongoing inflation pressures.

The Bank of Canada aims to keep inflation between 2% and 3%. Since March, inflation has edged up from around 1.5% to just over 2.5%. That increase is why the Bank isn’t ready to lower rates further.

What’s Driving Inflation in Canada?

Several factors are contributing to rising prices. Government spending has increased by about 4% this year, not including interest on the national debt. The federal deficit has grown roughly 70% compared to last year, prompting higher returns on bonds to attract investors.

Rising bond yields push fixed mortgage rates higher, which affects anyone looking to secure long-term financing. On top of that, uncertainty around potential new tariffs later this summer adds another inflationary risk. Even the threat of tariffs can influence rates by making borrowing more expensive.

What This Means for Ottawa Buyers

For many first-time buyers in Ottawa, where housing remains relatively competitive compared to Toronto or Vancouver, this raises a key question: should you buy now, and should you go with a fixed or variable mortgage?

• Variable rates may ease slightly over the next year, but longer-term projections suggest rates could rise above today’s levels within the next few years.
  
• Fixed rates are trending upward gradually. Securing a fixed rate near 4% today could provide stability for five years, protecting you from future increases. Shorter terms, like three years, could renew at a higher rate, so it’s important to plan ahead.
  

Take a Personalized Approach
Every buyer’s situation is unique. Your mortgage should fit your budget, goals, and risk tolerance. That’s why working with a mortgage broker in Ottawa can make a difference—they can help you compare lenders, assess affordability, and determine whether a fixed or variable option makes sense for you.

Time to Act
Even though the Bank of Canada hasn’t moved rates this month, the housing market and broader economy are still in flux. Now is the time to review your options, plan strategically, and ensure your mortgage aligns with your long-term goals.

Have questions about buying your first home in Ottawa? Reach out for a free consultation and get clarity on what’s best for your unique situation.