If you have a variable-rate mortgage or are thinking about entering the Saint John real estate market, you can breathe a sigh of relief for now. The Bank of Canada announced it is holding its key interest rate steady at 2.25%.

This decision, which was widely anticipated by financial experts, directly impacts the borrowing costs for many Canadians, including homeowners and potential buyers right here in Saint John.

Why Rates Are Staying Put

According to a report from the Canadian Real Estate Association (CREA), the Bank of Canada is keeping the rate stable despite recent economic growth. While the economy grew in the third quarter, the Bank expects weaker performance ahead due to shifting export trends and sluggish employment in trade-sensitive industries.

Inflation has remained close to the Bank’s 2% target for over a year, giving it room to maintain the current rate. The Bank stated the policy rate is “at about the right level” for now, but it continues to monitor economic uncertainty, particularly related to U.S. trade policies.

What This Means for Your Wallet in Saint John

For Saint John residents with variable-rate mortgages or lines of credit, this announcement means your interest rate and monthly payments will not change. This stability is welcome news for household budgets.

If you are looking to buy a home, this decision provides a predictable lending environment in the short term. While fixed-rate mortgages are not directly tied to the Bank of Canada’s policy rate, the central bank’s steady stance often contributes to stability in the bond markets that influence these long-term rates.

Looking Ahead

The financial world will be watching closely for the Bank of Canada’s next scheduled announcement on January 28, 2026. The Bank will release its full Monetary Policy Report at that time, which will provide deeper insights into its outlook for the Canadian economy.

Frequently Asked Questions

What is the Bank of Canada’s policy interest rate?

The policy interest rate, also known as the target for the overnight rate, is the interest rate at which major financial institutions borrow and lend one-day funds to each other. It serves as the foundation for the interest rates banks charge you for products like mortgages and loans.

How does this decision affect my variable-rate mortgage?

Your variable-rate mortgage is directly tied to your lender’s prime rate, which moves in tandem with the Bank of Canada’s policy rate. Since the rate was held, your mortgage rate and payment should remain unchanged.

Does this announcement impact fixed-rate mortgages?

Not directly. Fixed-rate mortgage rates are priced based on Government of Canada bond yields, which can fluctuate based on market expectations for future inflation and economic growth. However, the Bank’s overall tone and economic outlook can influence these bond markets.

When is the next interest rate announcement?

The Bank of Canada’s next scheduled date for announcing the overnight rate target is January 28, 2026.