Why the Bank of Canada’s Rate Pause Isn’t a Green Light for Cheap Mortgages

June 13, 2025 | Posted by: Kenlock Mortgage Group

Bank of Canada Holds Interest Rates – What It Means for Your Barrie Mortgage

If you've been holding off on getting a mortgage in hopes of lower interest rates, you’re not alone. On June 5, 2025, the Bank of Canada held its overnight lending rate at 4.75%, pausing rate changes for the first time in over two years. While this sounds like a positive shift, it’s important to understand what it really means for mortgage rates and your home financing plans across Ontario.

Understanding the Bank of Canada's Rate Pause

A “rate pause” means the Bank has chosen to maintain its current policy rate—neither increasing nor decreasing it. This signals that inflation may be easing slightly, but not enough to warrant a cut. For homeowners and buyers in Ontario, this rate has a direct impact on variable-rate mortgages, lines of credit, and other types of borrowing.

Are Ontario Mortgage Rates Going to Drop?

The answer? Not just yet. While some refinance mortgage rates may inch down if bond yields soften, there’s no promise of a dramatic dip. Many lenders are taking a cautious approach, due to ongoing economic pressures such as:

Stubborn inflation in essential sectors like food and housing
Tariffs and global supply chain disruptions
Economic uncertainty in global markets impacting Canadian forecasts

Fixed vs. Variable Mortgages – What’s the Best Move Right Now?

If you’re navigating a new home purchase, renewal, or refinance, it’s essential to weigh the pros and cons of fixed vs. variable mortgage rates in today’s market.

Fixed-rate mortgages tend to follow bond market trends. With bond yields easing slightly, there may be better short-term fixed options (1–3 years) coming soon.

Variable-rate mortgages, on the other hand, track the BoC’s overnight rate. Since there’s been no cut yet, your payments won’t go down immediately—but economists suggest we could see a cut later in 2025.

Pro Tip: Consider a shorter fixed-term mortgage. This gives you stability now, while keeping you flexible for future rate cuts.

This Isn’t a Green Light—Yet

While this pause is a hopeful sign, the Bank of Canada is still watching inflation and economic data carefully. If inflation flares up again, more rate hikes could return. But if things continue to cool, a rate cut could come later this year—making it vital to stay informed and plan accordingly.

How to Prepare for Mortgage Changes in 2025

Not sure how to proceed with your mortgage decisions? Here are some action steps to get ahead:

Review your current mortgage – Understand your rate and how long it’s locked in for.
Speak with a licensed mortgage broker – At Kenlock Mortgage, we’ll shop lenders and tailor a solution for your needs.
Get pre-approved – Planning to buy? A mortgage pre-approval now could lock in today’s rates and protect you from potential increases.

Planning to Renew or Refinance in Ontario?

Whether your mortgage is up for renewal or you're considering consolidating debt, now’s a good time to explore your options. We specialize in:

Final Thoughts from Kenlock Mortgage

The Bank of Canada's rate hold is a sign of possible stability—but not a clear signal to act without a plan. Mortgage rates are not dropping drastically yet, and the future remains uncertain. That said, this is a perfect opportunity to revisit your strategy, compare mortgage options, and prepare for what’s ahead.

Whether you're a first-time buyer, a renewing homeowner, or someone looking to tap into your home equity, let’s talk. At Kenlock Mortgage, we’re here to provide honest, unbiased advice and help you move forward with confidence.

Kenlock Mortgage – Trusted Mortgage Experts Across Ontario

From Barrie to Newmarket, Orillia to Innisfil, our team has helped hundreds of Ontarians find the right mortgage at the right time.

Ready to make your next move? Contact us today for a free consultation and let’s build your mortgage strategy together.

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