Bank of Canada Holds Rate at 2.25%: What This Means for You

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The Bank of Canada has announced that it is holding its benchmark interest rate at 2.25%.

This decision was widely expected, but the reasoning behind it matters—especially if you have a mortgage, are up for renewal, or are thinking about buying.

Let’s break it down in a simple, easy-to-understand way.

What’s Happening in Canada Right Now?

The Canadian economy is showing mixed signals:

The economy shrank slightly (0.6%) at the end of 2025
Consumer and government spending are still holding things up
The housing market remains soft
Unemployment has risen to 6.7%

👉 Translation: The economy isn’t crashing, but it’s not strong either.

What’s Happening with Inflation?

Inflation is moving closer to the Bank’s target:

Inflation dropped to 1.8% in February
Core inflation is now around 2% (the ideal range)
Food prices are still elevated
Gas prices are expected to increase due to global energy pressures

👉 Translation: Inflation is improving, but not fully stable yet.

What’s Happening Globally?

There are some bigger global factors influencing this decision:

Rising energy prices due to conflict in the Middle East
Increased volatility in financial markets
Slower but stable growth in the U.S.
Ongoing trade uncertainty (especially with U.S. tariffs)

👉 Translation: There’s a lot happening outside Canada that impacts interest rates here.

So… Why Did the Bank Hold Rates?

The Bank of Canada is balancing two key risks:

Economic growth is slowing → which normally supports rate cuts
Inflation could rise again (especially from energy prices) → which argues against cutting too soon

Because of this, they chose to pause and wait for more data.

What This Means for You

If You Have a Variable Rate Mortgage

No immediate change to your rate
Payments and interest costs remain stable (for now)

If You Have a Fixed Rate Mortgage

Fixed rates are influenced more by bond markets
Recent volatility could mean some upward pressure on fixed rates

If You’re Buying or Renewing

Rates are holding steady, but uncertainty remains
This is a time to focus on strategy, not timing the market

What to Watch Next

The next Bank of Canada announcement is scheduled for April 29th.

Between now and then, they’ll be watching:

Inflation trends
Economic growth
Global energy markets
Trade policy changes

My Take

We’re in a wait-and-see environment.

Rates aren’t rising—but they’re not dropping yet either. The opportunity right now is in planning ahead and understanding your options, especially if you’re renewing in the next 12–36 months.

Ready to chat about your goals?

Visit www.emilycallme.com Emily Miszk Mortgage Broker BRX Mortgage FSRA #13463