The Bank of Canada (BoC) announced on July 30, 2025, that it will hold its key lending rate at 2.75%, following a similar decision in June. For homeowners, buyers, and real estate investors in Peterborough, Ontario, this decision brings a sense of stability — but also raises questions about what might come next.

In this post, we’ll explore:

• What the BoC’s rate hold means for mortgages.
• How Peterborough’s housing market could be affected.
• TD Economics’ forecast for interest rate cuts in 2025.
• Strategies to prepare for the next rate announcement on September 17, 2025.

As a mortgage broker in Peterborough, Ontario, I’ve helped hundreds of clients navigate changing interest rates. Let’s break down the latest news and how it could impact your financial plans.

Why the Bank of Canada Held Its Rate

The BoC’s lending rate is the benchmark that Canadian banks use to set prime lending rates, which influence everything from mortgages to personal loans and business credit.

In its official statement, the Bank explained that:

“With still high uncertainty, the Canadian economy showing some resilience, and ongoing pressures on underlying inflation, the Governing Council decided to hold the policy interest rate unchanged.”

Key factors in the decision:

1. Economic resilience — Canada’s economy is performing better than some expected.
2. Stubborn inflation — Core inflation remains above target, which prevents aggressive rate cuts.
3. Trade and tariff pressures — Costs from tariffs and reconfigured trade relationships are keeping inflation sticky.

What This Means for Your Mortgage in Peterborough

1. Variable Rate Mortgages

If you have a variable-rate mortgage, your interest rate and payments will stay the same for now.

• Future cuts (if they happen later in 2025) could reduce your monthly payments.
• If you’re feeling payment pressure now, we can review refinancing options to improve your cash flow.

2. Fixed Rate Mortgages

For those with fixed rates, nothing changes until your renewal. However:

• If cuts occur before your term ends, you may be able to lock in at a lower rate during renewal.
• It’s worth setting a rate watch alert so we can act quickly if rates drop.

3. First-Time Buyers

A rate hold means predictable borrowing costs — good for budgeting your first home purchase.

• With potential cuts ahead, affordability may improve slightly by late 2025.
• Pre-approvals now can lock in today’s rates, giving you flexibility if the market shifts.

TD Economics’ Forecast — Rate Cuts in 2025

According to Leslie Preston, Senior Economist at TD Economics:

• Two rate cuts of 0.25% each are possible this year.
• By year-end, the BoC’s rate could drop to 2.25%.
• This could fuel residential investment and unlock pent-up housing demand.

In Peterborough, lower rates tend to bring more buyers into the market, increasing competition. Timing your purchase or refinance before demand spikes can be a smart move.

How Peterborough’s Market Might Respond

Peterborough’s housing market is highly sensitive to interest rate changes. Here’s how a rate hold or cut can play out locally:

• Short-term: Stable rates maintain the current market pace. Sellers and buyers can plan with confidence.
• Medium-term: If rates drop in late 2025, expect more buyers — especially those who have been waiting on the sidelines.
• Long-term: Rate cuts can fuel price growth, so buying before the market heats up could be advantageous.

What You Can Do Now

If You Own a Home:

1. Review your mortgage terms — know when your renewal is coming.
2. Consider a pre-emptive refinance if you’re in a high rate.
3. Keep an eye on September’s BoC announcement.

If You’re Planning to Buy:

1. Get pre-approved — secure a rate hold for up to 120 days.
2. Monitor market inventory in Peterborough.
3. Be ready to act quickly if rates fall and competition rises.

Next Steps Before September 17

The BoC’s next announcement could set the tone for the fall housing market.

• If they hold again, stability remains — but rate cuts could still come in late 2025.
• If they cut early, expect the housing market to react quickly.

As your local mortgage broker in Peterborough, I’m here to:

• Compare rates from multiple lenders.
• Advise on the right mortgage strategy for your situation.
• Help you prepare for potential opportunities in the months ahead.

📞 Let’s Talk:
If you want to discuss how this rate hold (and possible future cuts) could affect your mortgage or buying power, contact me today:

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