Whether you're renewing, refinancing, or just curious, Bank of Canada (BoC) rate announcements matter—a lot. But if you’ve ever watched one of those updates and thought, “OK, but what does this actually mean for me?”, you’re not alone.
This post is here to break it down, plain and simple. No jargon, no politics—just straight-up insight on how these rate announcements impact you, your mortgage, and your plans.
First—What Is the Bank of Canada Rate?
The Bank of Canada sets something called the “overnight rate,” which is the interest rate banks charge each other to borrow money overnight. Sounds boring, but it sets the tone for nearly every other interest rate in the country—especially variable mortgage rates.
It’s also the tool the BoC uses to fight inflation or stimulate the economy. When inflation’s hot, they raise rates to cool things down. When things slow, they cut rates to get money moving again.
How Often Do They Make These Announcements?
There are eight scheduled announcements per year, and trust me, lenders, economists, and mortgage nerds like me watch them like a hawk. Depending on what the BoC says, rates can stay put, rise, or drop—sometimes with immediate impact.
2025 Dates to Watch (Tentative):
-
January 22
-
March 5
-
April 16
-
June 4
-
July 23
-
September 3
-
October 22
-
December 10
So… What Happens If They Raise the Rate?
If you have a variable-rate mortgage, your lender will almost always follow the BoC’s lead and raise their prime rate. This means your payment could go up if you're on a variable adjustable payment setup.
If you're on a static payment variable mortgage (like with TD or HSBC), your payment might stay the same for now—but more of it will go toward interest and less toward your principal. Eventually, you could hit your "trigger rate" and be forced to adjust.
If you're in a fixed-rate mortgage: you're insulated—for now. But rising BoC rates usually push fixed mortgage rates up too, because they influence the bond market (which fixed rates follow).
Key takeaway? Rate hikes = higher payments or borrowing costs, especially for new borrowers or those renewing soon.
And What If They Cut the Rate?
This is where things feel like a win—especially if you're in a variable rate. Your rate usually drops within a few days, and your payments may decrease or more of your payment will go toward your principal. That’s how you build equity faster.
Fixed-rate mortgage holders won’t see immediate savings, but lower BoC rates often signal falling bond yields—which can lead to cheaper fixed rates down the road.
Bottom line: Rate cuts = potential savings, particularly for variable-rate clients and those shopping for a mortgage.
What’s Happening in 2025?
As of spring 2025, we’re seeing inflation come back into check, and there’s serious talk of rate cuts starting as early as June. If you’ve been sitting on the sidelines, waiting to buy or renew, the next few announcements could open some doors.
But be careful: markets move on expectations, not just reality. Sometimes, the talk of a rate cut can shift fixed rates before anything actually happens. That’s why locking in a pre-approval rate now can be a smart move.
Fixed vs. Variable in a Changing Rate Environment
Let’s get real: the fixed vs. variable debate is heating up again.
-
Fixed-rate mortgages give you peace of mind—consistent payments, easier budgeting, and no nasty surprises.
-
Variable-rate mortgages can offer savings if rates drop, and some offer more flexible penalties if you break the mortgage early.
What’s best for you depends on:
This is where a mortgage broker (hey, that’s me!) can help map it all out.
What Should You Do When a BoC Rate Announcement Is Coming?
Here’s what I recommend:
✅ If you’re buying soon: Get a pre-approval now. It holds your rate for 120 days and protects you from increases.
✅ If you’re renewing within 6–12 months: Let’s review your options early. Some lenders allow you to lock in a renewal rate up to 6 months ahead.
✅ If you’re in a variable rate: Review your payments and trigger points. A small rate change might not seem like much—but it adds up fast.
✅ If you’re worried about future rates: We can model different scenarios to find the right balance between savings and stability.
The Wildcard: How Lenders React
Here’s a pro tip: not all lenders react the same way, or at the same time.
Some lenders adjust their rates hours after a BoC announcement. Others wait days. Some pass the full rate hike or cut to clients. Others don’t.
That's why working with a broker matters—we track how each lender behaves so you’re not stuck with a slowpoke or a jumpy one.
Final Thoughts
Bank of Canada rate announcements can feel technical and out of your control. But their ripple effects absolutely reach your wallet, your mortgage strategy, and your long-term plans.
If you’re not sure how the next rate move could affect you—or if you just want to be proactive—let’s chat. Whether it’s locking in a great rate, reviewing your payment strategy, or getting prepped to make a move, I’m here to help.