Bank of Canada Holds Rate at 2.25% — July 15, 2026

Carla Sturm • July 15, 2026

The Bank of Canada announced today that it is holding its target for the overnight rate at 2.25%, with the Bank Rate at 2.5% and the deposit rate at 2.20%. The tone of today's announcement is notably more optimistic than previous months. Here's what's changed and what it means for you.

What the Bank of Canada Said

Signs of Improvement

For the first time in several months, the Bank is signalling that Canada's economy is showing real signs of improvement. Growth is picking up, and inflation is projected to ease gradually from its recent spike. While risks remain, particularly around the Middle East conflict and U.S. trade policy, the overall tone has shifted toward cautious optimism.

The Global Picture

Since the April Monetary Policy Report, global economic prospects have been dampened by higher oil prices from the Middle East conflict. However, the build-out of artificial intelligence is now supporting economic activity in a growing number of countries. Oil prices are still below their April peak, though the situation in the Middle East remains volatile.

The U.S. economy is growing at about 2.5%, driven by strong consumer spending and booming AI investment. China continues to expand on the back of robust exports. Europe has been weighed down by high energy prices but is expected to strengthen in the second half of the year if prices ease as anticipated. The Bank projects global GDP growth will slow to 2.75% in 2026 before recovering to around 3.25% in 2027 and 2028.

The Canadian Economy

Canada's GDP data over the past year has been choppy. Growth stalled as the economy adjusted to new tariffs, high uncertainty, and slower population growth. But there are now clear signs that growth has resumed in the second quarter, estimated at 2.5%. The Bank acknowledges this largely reflects the unwinding of temporary factors, but sources of growth appear to be broadening.

Consumer spending looks solid. Housing activity has been weak but is showing signs of stabilizing. Export growth has resumed and is expected to strengthen. Business investment is projected to pick up modestly, boosted in the near term by the oil and gas sector. More businesses also report they are finding ways to navigate through trade uncertainty.

Following GDP growth of 0.7% in 2026, the Bank projects growth of 1.8% in both 2027 and 2028. The unemployment rate was 6.5% in June, continuing to hover in the 6.5% to 7% range it has maintained since late 2024.

Inflation

CPI inflation rose to 3.2% in May, mainly due to higher gasoline prices linked to the Middle East conflict. Excluding gasoline, inflation was just 2.2%, and core inflation measures remained close to 2%. That is an important distinction: the inflation we are seeing is largely an energy story, not a broad cost-of-living surge.

Near-term inflation expectations remain sensitive to gasoline prices, but longer-term expectations are well anchored. The Bank expects CPI inflation to stay elevated in June before easing gradually in the coming months, returning to around 2% in early 2027. Inflation is then forecast to average around 2% in 2027 and 2028.

Why the Bank Held

Governing Council judged that the current rate of 2.25% remains appropriate to sustain the economic recovery and bring inflation back to target. Uncertainty is still high, and the Bank remains prepared to adjust monetary policy as needed. The commitment to price stability remains firm through this period of global upheaval.

What This Means for Mortgage Holders and Buyers

A rate hold means no immediate change to variable-rate mortgage payments or home equity lines of credit (HELOCs) tied to the prime rate. The prime rate remains at 4.45%.

Today's announcement carries a more positive signal than we have seen in recent months. The economy is recovering, core inflation is near target, and the Bank's language suggests the path forward is one of gradual improvement, not further tightening. For borrowers, this is an encouraging environment to plan ahead.

If you are renewing a mortgage in the coming months, thinking about purchasing, or weighing your fixed vs. variable options, now is a good time to have that conversation. The landscape is shifting, and being prepared puts you in the best possible position.

The next scheduled rate announcement is September 9, 2026 .

As always, every borrower's situation is unique. If you have questions about how today's decision affects your mortgage, reach out. We would love to help you navigate your options.

Information sourced from the Bank of Canada's official press release dated July 15, 2026.

Carla Sturm
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What Older Canadians Should Know About Mortgage Financing

By Carla Sturm • July 8, 2026
Retirement doesn’t always mean a mortgage-free life anymore. And that’s okay. Between higher home prices, rising living costs, and longer life expectancy, many Canadians are choosing to retire with a mortgage or refinance later in life to create more flexibility. The goal isn’t perfection. It’s having options that actually support the life you want to live. If you’re thinking about how a mortgage fits into your retirement years, you’re not alone—and you’re not out of options. Why work with an independent mortgage professional? Because retirement financing is not one-size-fits-all. Unlike a single bank, an independent mortgage professional can look across multiple lenders and solutions to find what truly fits your income, equity, and long-term plans—not just what one institution offers. Mortgage options available in retirement Traditional Mortgage Solutions Many retirees still qualify for standard mortgages. Pension income, investment income, and other retirement sources can often be used to support an application. If you have good equity and solid credit, this is often the lowest-cost option. Reverse Mortgages For homeowners 55+, a reverse mortgage can unlock tax-free equity from your home with no monthly payments required. There’s no income verification or medical questions, making it a helpful option for those who want to improve cash flow while staying in their home. Home Equity Line of Credit (HELOC) A HELOC allows you to access your home equity as needed and only pay interest on what you use. Many retirees appreciate the flexibility and like consolidating income and expenses in one place. Private Financing Sometimes life throws a curveball. If timing, income, or credit create challenges, private financing can act as a short-term bridge. It’s not usually the first choice, but it can provide solutions when traditional lenders can’t. If you’re approaching retirement—or already there—and wondering how your mortgage fits into the picture, let’s talk. A clear plan can make retirement feel a lot more secure and a lot less stressful.

Breaking Down the Real Costs of Homeownership

By Carla Sturm • July 1, 2026
Don’t Forget About Closing Costs When planning to buy a home, most people focus on saving for the down payment. But the truth is, that’s only part of the equation. To actually finalize the purchase, you’ll also need to budget for closing costs —the out-of-pocket expenses that come up before you get the keys. Closing costs can add up quickly, which is why they should be part of your pre-approval conversation right from the start. Lenders will even require proof that you’ve got enough funds set aside. For example, if you’re getting an insured (high-ratio) mortgage, you’ll need at least 1.5% of the purchase price available in addition to your down payment. That means a 10% down payment actually requires 11.5% of the purchase price in cash to make everything work. Let’s break down some of the most common expenses you should prepare for: 1. Home Inspection & Appraisal Inspection : Paid by you, this gives peace of mind that the property is in good shape and doesn’t have hidden problems. Appraisal : Required by the lender to confirm value. Sometimes this is covered by mortgage insurance, sometimes by you. 2. Legal Fees A lawyer or notary is required to handle the title transfer and make sure the mortgage is properly registered. Legal fees are often one of the larger closing costs—unless you’re also responsible for property transfer tax. 3. Taxes Many provinces charge a property or land transfer tax based on the home’s purchase price. These fees can range from hundreds to thousands of dollars, so you’ll want to factor them in early. 4. Insurance Property insurance is mandatory—lenders won’t release funds without proof that the home is insured on closing day. Optional coverage like mortgage life, disability, or critical illness insurance may also be worth considering depending on your financial plan. 5. Moving Costs Whether you’re renting a truck, hiring movers, or bribing friends with pizza and gas money, moving comes with expenses. Cross-country moves especially can be surprisingly pricey. 6. Utilities & Deposits Setting up new services (electricity, water, internet) can involve connection fees or deposits, particularly if you don’t already have a payment history with the utility provider. Plan Ahead, Stress Less This list covers the big-ticket items, but every purchase is unique. That’s why it pays to have an accurate estimate of your personal closing costs before you make an offer. If you’d like help planning ahead—or want a breakdown tailored to your situation—let’s connect. I’d be happy to walk you through the numbers and make sure you’re fully prepared.