Bank of Canada holds rate at 2.75% – Here’s what it means for you

Hi Debra & Tom,

The Bank of Canada announced today it is keeping its key interest rate unchanged at 2.75%, marking its second pause in this rate-cutting cycle.

After a 25-basis-point cut in March many had hoped for a follow-up this month. But with uncertainty around U.S. tariffs still high, the Canadian economy “softer but not sharply weaker,” and recent inflation data showing unexpected firmness, the Bank said it will take a wait-and-see approach before making further moves.

What this means for you:

• Variable-rate mortgage holders: Your rate and payments will stay the same—for now. Since variable rates are tied to the prime rate, they won’t change unless the Bank of Canada moves again.
• Fixed-rate mortgage holders: There’s no direct impact today, but future cuts could lead to more favourable rates when it’s time to renew or shop for a new mortgage.
• Lines of credit and other prime-based loans: Interest costs remain unchanged, with most lenders holding prime steady at 4.95% (5.10% at TD).

Looking ahead:

The Bank’s next policy announcement is set for July 30, 2025. Until then, economists will be watching inflation and economic growth closely for signs of where rates are headed next.

If you have questions or want to chat about what this means for your mortgage plans, I’m here to help. Reach out anytime!

Katherine (Kate) Douglas
Mortgage Associate