November 2025 Update
The Bank of Canada officially cut its key interest rate to 2.25% at the end of October, marking the fifth cut since early 2024.
It's likely the last one for a while.
Governor Tiff Macklem said rates are now "at about the right level," signaling that the central bank's goal for 2026 is stability rather than more rapid easing.
So what does this mean for Canadian homeowners and anyone thinking about getting into the 2026 housing market next year?
Let's break it down.
This year's economic slowdown wasn't exactly a surprise. Between trade tensions with the U.S., higher living costs, and slower job growth, the Bank faced mounting pressure to ease financial strain on households.
Inflation has now cooled close to the 2% target, giving the Bank room to cut without stoking new price spikes. The move was designed to:
In short: rates were cut to help Canadians adjust, not to re-ignite another housing boom.
This cut provides a small but welcome break. Payments are easing slightly, and the bigger benefit is psychological (i.e., a sense that the worst of the rate-hike era is finally behind us).
It's a sign that the bottom of this cycle is near. Fixed mortgage rates are tied to bond yields, which have already factored in expectations of lower policy rates.
That means the best rates available today may not get much better.
Compare early renewal options (some lenders allow you to secure a lower rate months in advance).
Consider blending or extending your term to lock in stability.
Explore whether refinance Canada options could free up cash flow or consolidate higher-interest debts.
Even small adjustments now can save thousands over the life of your mortgage.
After two years of record-low affordability, the environment is finally shifting in buyers' favour, at least a little.
Lower rates mean lower qualifying stress tests, and paired with the recent provincial and federal first-time-buyer incentives (like Ontario's new HST rebate), the conditions heading into spring 2026 could open new doors.
That said, affordability isn't just about interest rates… it's also about supply.
Many markets, particularly in Ontario and B.C., still face inventory shortages. That balance will matter far more than a quarter-point cut.
Lock in today's rate for up to 120 days
Give time to correct credit blemishes
Provide a clear budget before listings heat up again
As of late 2025, average mortgage rates Canada are sitting around:
(some lenders below 4%)
range
Here's how to think about the choice heading into 2026:
Predictable payments, ideal for stability in uncertain times.
Best suited if you plan to stay put for several years.
Flexibility and potential savings if rates drop again in 2026.
Better for borrowers comfortable with some movement in monthly payments.
Many clients are opting for shorter-term fixed mortgages (2- to 3-year), a middle-ground strategy that offers stability now with flexibility later if rates shift again.
Whether you're renewing, refinancing, or planning to buy, the next few months are about positioning yourself before the next cycle begins.
Don't wait until renewal day; early planning can uncover options to save on interest or fees.
Homeowners with solid equity can access lower-cost funds for renovations, investments, or debt consolidation.
If you benefited from the rate cut, keep that extra breathing room aside because stability doesn't last forever.
Markets and policies are changing quickly. Having a broker who monitors both saves you from missing an opportunity.
The latest Bank of Canada rate cut brings a dose of relief, and a signal that the economy is entering a new phase of stability heading into 2026.
For homeowners, it's a chance to review and optimize.
For buyers, it's a window to plan ahead before competition ramps up again.
Either way, this isn't the time to sit still; it's the time to make informed moves.
If you'd like to talk through what this rate cut means for your mortgage or your plans for 2026, reach out anytime. I'd be happy to walk you through the numbers.