The Bank of Canada’s most recent meeting on December 10, 2025 held no surprise for analysts last week. Holding rates firm at 2.25%, the Board remarked in its official statement, “Canada’s economy grew by a surprisingly strong 2.6% in the third quarter” and “Employment has shown solid gains in the past three months”, with underlying inflation “still around 2.5%.” This means that the Prime Rate will stay at 4.45% until at least the end of January if not beyond that.
Mortgage volumes in the first-time home buyers category this year were strong, up 20% year-over-year. This was due to lower prices and rates. Also, the national average mortgage amount was the highest since early 2022 at roughly $438,000.
According to Stats Canada, mortgage debt accounted for 75% of household credit market debt, with household credit market debt continuing to outpace household disposable income – an increasingly negative trend.
The Bank of Canada noted that “the current policy rate is at about the right level to keep inflation close to 2%. The tariff situation is still up in the air and this will keep everyone on edge with rates until an agreement is hammered out. There is a large sentiment out there right now that mortgage rates are going to be on pause for quite some time as we sit in this normal range of rates. The rates we are seeing today resemble the norm prior to the lows of the covid rates.
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