Bank of Canada Expected to Hold Rates Again as Mortgage Renewal Pressures Persist

The Bank of Canada is broadly expected to leave its policy rate unchanged at 2.25% when it announces its decision on 15 July, extending a hold that has been in place since October 2025. Most bank prime rates have held at 4.45%, and mortgage market analysts see little near-term prospect of cuts, with inflation risks, trade disruption and an economy still adjusting to shifting US trade relationships keeping the central bank cautious. Fixed mortgage rates remain under pressure, tracking a five-year Canadian bond yield hovering around 3.1% after a positive June labour report and a drop in the unemployment rate. The backdrop matters because roughly 3.1 million Canadian mortgages come up for renewal in 2026. Bank of Canada research has estimated that around 10% of those borrowers face payment increases exceeding 40%, while about 65% face rises of between 5% and 25% and a quarter may actually see payments fall. Canada's banking regulator has separately identified real estate secured lending as the primary threat to financial stability, describing the condo segment as strained, particularly in Toronto and Vancouver, where sales have fallen to levels not seen since the 1990s. Affordability worsened across all 13 major Canadian housing markets in May.