The Countdown Is On: What the Next Bank of Canada Decision Could Mean

The Bank of Canada’s next interest rate announcement is January 28, 2026—exactly one week away. The key overnight rate has held steady at 2.25% since the December 10 decision, following a 25 basis point cut in October.
 

What We Expect:

Markets are pricing in a strong chance of a hold, but a 25 basis point cut to 2% remains possible if incoming data shows continued economic softness. A hike seems unlikely given inflation trends near the 2% target and recent labour market improvements.

Here’s what each scenario would mean for real estate and your wallet:
 

Scenario 1: 25 basis point cut (to 2%)

• Variable mortgage payments drop slightly (~$15–$20 per $100K borrowed).?
• More buyers qualify for larger loans, potentially lifting spring demand.
• Sellers see a small uptick in qualified traffic but face slightly softer pricing power.
• Best for: Buyers stretching budgets, investors eyeing cash flow.

 

Scenario 2: Rate hold at 2.25% (most likely)

• Status quo: Variable rates stay put, fixed rates follow bond markets.
• Gives buyers/sellers planning clarity—no sudden payment shocks or qualification changes.
• Market continues gradual recovery without major disruption.
• Best for: Anyone wanting to move without betting on rate timing.

 

Scenario 3: Rate hike (least likely)

• Variable payments rise (~$15–$20 per $100K), shrinking buyer pools.
• Sellers face more price sensitivity; listings may need sharper pricing.
• Signals hotter inflation or growth, potentially cooling overheated segments.
• Best for: Sellers locking in now before qualification tightens.

 

Your Next Step:

Don’t wait for January 28 to figure out your plan. Whether rates drop, hold, or rise, the right strategy starts with knowing your numbers. Team OLIVIERI offers FREE Neighbourhood Market Watches for sellers (local pricing intel) and Personalized Home Searches for buyers (instant matching alerts). Contact us to get set up and stay ahead of whatever the Bank of Canada decides!
 

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