On January 28, 2026, the Bank of Canada held its overnight lending rate at 2.25%. This marks another hold in the Bank’s effort to observe how inflation and the broader economy respond to evolving encomic pressures.
Why Did the Bank Hold?
The decision to maintain the current policy rate reflects ongoing uncertainty in the economic data. December’s inflation figures showed a continued decline, but not at a pace that guarantees price stability. At the same time, economic growth has slowed, and the labour market is showing early signs of softening. The Bank of Canada has forecast modest economic growth as inflation remains close to the 2% target. In this environment, the Bank chose to pause and monitor rather than move too early in either direction.
What It Means for Mortgages
Variable-rate mortgage holders will not see immediate changes in their monthly payments.
Fixed-rate mortgages are driven by bond markets. A steady rate environment can anchor bond yields, although any change in economic sentiment could still influence fixed rates up or down.
Housing Market Context
A rate hold doesn’t mean the market is static. It creates an environment where buyers and sellers can plan more confidently without anticipating immediate cost changes. In places like Toronto, where affordability remains an issue, stability can help bring some participants back into the market, particularly those who paused due to rate volatility.
At Unna Real Estate, we guide families through uncertain markets every day. If you’re feeling overwhelmed or unsure what this rate change means for your home journey in Canada, we’re here to help bring clarity, and real options to the table. Click here to contact us.
