By Dillan Kelly, Mortgage Broker with Dominion Lending Centres Mortgage Excellence
The Bank of Canada has chosen to keep its overnight lending rate unchanged at 2.25%, a decision that reflects ongoing economic uncertainty both in Canada and globally. While this may sound like a “wait and see” move, it has real implications for mortgage rates, housing affordability, and financial planning — especially for buyers and homeowners in Lethbridge, Coaldale, and across Alberta.
Insights from Dr. Sherry Cooper, Chief Economist at Dominion Lending Centres, help explain why this decision matters and how borrowers can respond strategically.
📊 Why the Bank of Canada Is Holding the Line on Rates
The current policy rate sits at the low end of what the Bank of Canada considers a neutral range. In practical terms, this means interest rates are set to neither push the economy forward nor slow it down.
Inflation remains slightly above the Bank’s target, and core inflation measures are still elevated. Because of this, policymakers believe the current rate is appropriate for the time being, even as economic growth shows signs of strain.
According to Dr. Cooper’s outlook, Canada’s economy is expected to remain sluggish in the short term due to weaker export performance. While growth is forecast to improve in 2026, trade uncertainty remains a key risk factor.
🌍 Global Trade Uncertainty and Its Impact on Canada
Trade relations — particularly with the United States — continue to weigh heavily on Canada’s economic outlook.
While Canada is expanding trade relationships globally, Dr. Cooper notes that no market can realistically replace the U.S. in terms of scale, proximity, and efficiency. Increased oil exports to China help, but industries such as steel and aluminum remain highly dependent on U.S. demand.
Ongoing questions surrounding the future of the Canada–U.S.–Mexico Agreement (CUSMA) have further dampened business and consumer confidence. This uncertainty filters down into employment, investment, and housing activity.
📈 Why Fixed Mortgage Rates Have Been Rising
Many Canadians are surprised to see fixed mortgage rates increase even though the Bank of Canada hasn’t raised its policy rate.
That’s because fixed mortgage rates are driven by bond yields, not the overnight rate. Recently, Canadian bond yields have moved higher, prompting lenders to adjust fixed rates upward.
For borrowers, this means:
- Variable-rate mortgages remain closely tied to the Bank of Canada’s policy rate
- Fixed-rate mortgages reflect market expectations about inflation and growth
- When bond yields rise, fixed mortgage rates often follow
In uncertain environments like this, many borrowers prioritize predictability, making fixed rates more appealing despite recent increases.
🏡 What This Means for Homebuyers and Homeowners in Alberta
For anyone working with an Alberta mortgage broker, local market conditions matter.
While some regions of Canada are experiencing sharp housing slowdowns, markets like Lethbridge and Coaldale remain more balanced. That said, higher fixed rates and cautious consumer sentiment mean buyers and homeowners need to be strategic.
This is especially important if you are:
- Purchasing your first home
- Renewing a mortgage in the next 6–12 months
- Considering refinancing to consolidate debt or access equity
- Unsure whether a fixed or variable rate makes sense right now
✅ Talk to a Local Mortgage Expert Before Rates Change Again
In times of economic uncertainty, personalized mortgage advice is more important than ever.
As a Lethbridge mortgage broker with Dominion Lending Centres Mortgage Excellence, I help clients navigate changing market conditions by:
- Securing competitive rates
- Comparing fixed and variable options based on real data
- Building mortgage strategies that support long-term financial stability
- Managing renewals and refinances with confidence
Serving Lethbridge, Coaldale, and communities across Alberta.
Book a free, no-obligation mortgage consultation to review your options and make informed decisions in today’s market.
🧠 About the Source
Economic insights and market commentary in this article are informed by analysis from Dr. Sherry Cooper, Chief Economist at Dominion Lending Centres.
