The Bank of Canada held its policy rate at 2.25% on July 15, the sixth consecutive decision without a change, and the longest stretch of stability we’ve seen in a while. The next announcement lands September 2, and bond markets are pricing in a very high probability of another hold, with barely a 1% chance of a hike. Nothing is guaranteed until the Bank actually says it, but if you’re planning around a purchase, a sale, or a renewal this month, steady is the working assumption.
Why Renewals Are the Real Story Right Now
Rate holds make for a quiet headline, but the bigger story this year is what’s happening to people renewing mortgages they locked in five years ago. A Royal LePage survey found 76% of British Columbians renewing this year expect their payments to increase, and 42% say they’re more nervous about it than they were at their last renewal, both the highest numbers in the country.
The math explains why. Someone who locked in a 5-year fixed rate back in 2020 could have gotten as low as 1.45%. Today, a 5-year fixed sits closer to 3.89%. On a typical $500,000 mortgage over 25 years, that’s the difference between a $1,973.94 monthly payment and $2,608.91, an extra $635 a month, just from the renewal.
Most people are absorbing it: 70% say they’ll pay the higher amount to stay in their home. The other 30% are weighing changes, selling and moving to something smaller, relocating to a more affordable area, or renting out part of the house to help cover the difference. If you’re in that second group and want to talk through what your options actually look like in today’s market, that’s exactly the kind of conversation I’m happy to have. No pressure, just information.
What This Means If You’re Buying
A held rate doesn’t move your mortgage math dramatically week to week, but stability itself is useful. It means the goalposts aren’t shifting on you while you’re house hunting or waiting on a pre-approval. If you’ve been sitting on the sidelines waiting for “more certainty” before making a move, six straight holds is about as certain as this market gets right now.
What to Watch Next
- September 2: Bank of Canada rate announcement
- Your own renewal date: if it’s within the next 12 months, it’s worth running the numbers now rather than waiting for the letter from your lender
- Fixed vs. variable: with the gap between them narrower than it’s been in years, it’s worth a real conversation with your mortgage broker rather than defaulting to whatever you had last time
Rates are one piece of the puzzle. If you want to talk through what any of this means for your specific plans, whether that’s buying, selling, or just figuring out your renewal, reach out any time.
