Bank of Canada Holds Interest Rate at 2.25%: What This Means for Ontario Buyers and Sellers
Team Olivieri
Wednesday, January 28, 2026
All eyes were on the Bank of Canada today, and once again, the central bank chose stability.
On January 28, 2026, the Bank of Canada announced it would maintain its policy interest rate at 2.25%, marking the third consecutive hold after a 25-basis-point cut in October. For homeowners, buyers, sellers, and investors across Ontario, this decision sends an important signal about where the housing market — and borrowing costs — may be headed next.
Rather than overwhelming Canadians with rapid changes, the Bank is choosing a measured approach, balancing inflation control with economic stability. Here’s what that means for real estate.
Globally, economic growth remains steady, with the United States continuing to outperform forecasts thanks to consumer spending and investment tied to artificial intelligence. Europe has seen support from service-sector activity and fiscal policy, while China’s growth is slowing as domestic demand weakens.
At home, Canada’s economy faces mixed signals. After a strong third quarter, growth appears to have stalled toward the end of 2025. Exports continue to be affected by U.S. trade restrictions, but domestic demand is slowly improving. Employment has increased, though the unemployment rate remains elevated at 6.8%, and many businesses are still hesitant to expand hiring.
With inflation easing closer to the Bank’s 2% target, policymakers determined that holding the rate steady was the most appropriate move — for now.
The Bank’s preferred measures of core inflation have eased from 3% in October to approximately 2.5%, reinforcing the view that inflation pressures are moderating. Looking ahead, the Bank expects inflation to remain close to its 2% target through 2026 and 2027.
However, global trade uncertainty and geopolitical risks remain wildcard factors. As a result, the Bank is choosing caution — keeping rates steady while monitoring economic data closely.
Mortgage rates are not rising, and while future cuts are not guaranteed, stability allows buyers to plan with more confidence. This environment can be particularly helpful for first-time buyers or those considering locking in a mortgage rate before market conditions shift again.
With borrowing costs holding steady and inventory levels still manageable in many Ontario markets, buyers may find opportunities before competition intensifies.
When rates stop moving unpredictably, more buyers are willing to re-enter the market. This can translate into increased showings, stronger demand, and improved negotiating conditions — especially for well-priced and well-presented homes.
If future rate cuts materialize later in 2026, buyer demand could accelerate quickly. Sellers who act ahead of that shift may benefit from less competition and more serious buyers.
The next interest rate announcement is scheduled for March 18, 2026, with the next full Monetary Policy Report set for April 29, 2026.
For those navigating Ontario’s real estate market, this period of rate stability presents an opportunity to plan strategically rather than react hastily.
Stability builds confidence — and confidence drives real estate decisions. Whether you’re buying, selling, or simply watching the market, understanding how Bank of Canada interest rate decisions affect housing is key to making informed moves.
If you’d like to discuss how this rate decision impacts your real estate plans specifically, Team OLIVIERI is always here to help.
On January 28, 2026, the Bank of Canada announced it would maintain its policy interest rate at 2.25%, marking the third consecutive hold after a 25-basis-point cut in October. For homeowners, buyers, sellers, and investors across Ontario, this decision sends an important signal about where the housing market — and borrowing costs — may be headed next.
Rather than overwhelming Canadians with rapid changes, the Bank is choosing a measured approach, balancing inflation control with economic stability. Here’s what that means for real estate.
Why the Bank of Canada Held the Rate
The Bank’s latest outlook suggests that while economic conditions are evolving, they remain broadly in line with expectations outlined in the October Monetary Policy Report.Globally, economic growth remains steady, with the United States continuing to outperform forecasts thanks to consumer spending and investment tied to artificial intelligence. Europe has seen support from service-sector activity and fiscal policy, while China’s growth is slowing as domestic demand weakens.
At home, Canada’s economy faces mixed signals. After a strong third quarter, growth appears to have stalled toward the end of 2025. Exports continue to be affected by U.S. trade restrictions, but domestic demand is slowly improving. Employment has increased, though the unemployment rate remains elevated at 6.8%, and many businesses are still hesitant to expand hiring.
With inflation easing closer to the Bank’s 2% target, policymakers determined that holding the rate steady was the most appropriate move — for now.
Inflation Is Cooling, but the Bank Is Staying Cautious
Inflation rose to 2.4% in December, influenced by temporary factors such as last winter’s GST/HST holiday. When taxes are excluded, inflation has been trending downward since September.The Bank’s preferred measures of core inflation have eased from 3% in October to approximately 2.5%, reinforcing the view that inflation pressures are moderating. Looking ahead, the Bank expects inflation to remain close to its 2% target through 2026 and 2027.
However, global trade uncertainty and geopolitical risks remain wildcard factors. As a result, the Bank is choosing caution — keeping rates steady while monitoring economic data closely.
What This Means for Ontario Home Buyers
For buyers, a rate hold brings clarity.Mortgage rates are not rising, and while future cuts are not guaranteed, stability allows buyers to plan with more confidence. This environment can be particularly helpful for first-time buyers or those considering locking in a mortgage rate before market conditions shift again.
With borrowing costs holding steady and inventory levels still manageable in many Ontario markets, buyers may find opportunities before competition intensifies.
What This Means for Ontario Home Sellers
For sellers, a steady interest rate supports buyer confidence.When rates stop moving unpredictably, more buyers are willing to re-enter the market. This can translate into increased showings, stronger demand, and improved negotiating conditions — especially for well-priced and well-presented homes.
If future rate cuts materialize later in 2026, buyer demand could accelerate quickly. Sellers who act ahead of that shift may benefit from less competition and more serious buyers.
Looking Ahead: What Comes Next?
The Bank of Canada emphasized that monetary policy remains data-dependent. While the current rate is deemed appropriate, the Bank is prepared to respond if economic conditions change.The next interest rate announcement is scheduled for March 18, 2026, with the next full Monetary Policy Report set for April 29, 2026.
For those navigating Ontario’s real estate market, this period of rate stability presents an opportunity to plan strategically rather than react hastily.
Final Thoughts
A rate hold may not make headlines like a cut or hike, but it matters.Stability builds confidence — and confidence drives real estate decisions. Whether you’re buying, selling, or simply watching the market, understanding how Bank of Canada interest rate decisions affect housing is key to making informed moves.
If you’d like to discuss how this rate decision impacts your real estate plans specifically, Team OLIVIERI is always here to help.
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