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BoC Held Again at 2.25% — But a Rate Hike Is Now More Likely Than Not Before Year-End

  Bond markets put the odds of an October 28 hike at 57%. Here's what the big banks are forecasting, what it means for your mortgage payment, and how to think about your next move. MoneySavings.ca · September 17, 2026 The Bank of Canada kept its overnight rate at 2.25% on September 2 — the seventh consecutive hold since the last cut in October 2025. On the surface, nothing changed. Below the surface, everything did. Governor Tiff Macklem's post-decision language was the most hawkish the Bank has sounded in over a year. He flagged that persistently high oil prices (Brent has since touched $107) and new U.S. tariffs — combined with Canada's own $27.6 billion retaliation list — are creating genuine upside risks to inflation. The BoC's August deliberations summary, released September 16, confirmed the Governing Council is now actively weighing a hike, not just a hold. The August CPI reading that came in on September 14 didn't settle anything: headline inflation held at ...
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New Mortgage Policies Expected to Drive Canadian Home Prices Higher in 2025

 

According to a recent analysis by TD Economics, new federal mortgage policies are set to boost Canadian home prices in 2025. These policies, which include raising the cap on insured mortgages and extending amortization periods for first-time homebuyers, are expected to provide a secondary tailwind to the housing market.

The new measures, effective December 15, 2024, will increase the insured mortgage cap from $1 million to $1.5 million, allowing more Canadians to qualify for mortgages with lower down payments. Additionally, first-time homebuyers and purchasers of new builds will be able to take out loans with a 30-year amortization period.

TD Economics predicts that these changes will result in home sales and average prices being two to four percentage points higher by the end of 2025 than they would have been without the new policies. However, the report also warns that the initial boost in affordability may erode over time, potentially slowing sales volume and price growth by the end of 2026.

While these policies are not expected to trigger a housing boom on their own, they will complement lower interest rates and improving economic conditions, contributing to a more robust housing market. The changes come amid an ongoing affordability crisis driven by population growth, sluggish new construction, and inflation.

Overall, the new federal mortgage policies aim to make homeownership more accessible to Canadians, particularly younger generations, while also addressing the broader housing market challenges.


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