After seven straight rate cuts, the Bank of Canada has finally tapped the brakes—at least for now. The overnight rate remains unchanged, keeping prime rate steady at 4.95%.

If you’re thinking, “Wait… I thought rates were going to keep falling?”—you’re not alone. It’s easy to get lulled into a false sense of security in a downward cycle. But this is a pause, not a full stop. Most economists still expect more cuts ahead, with five of the Big Six banks forecasting another 0.50% to 0.75% in reductions by the end of 2025. The one holdout? Scotiabank, ever the contrarian, is calling for a flatline until the end of 2026.

So, what happened?

 

Why the Hold?

The odds of a cut at this April 16th meeting were basically a coin flip heading into the announcement. Then, on April 15th, Statistics Canada confirmed that March inflation cooled to 2.3%—a 0.3% drop from February. Lower inflation typically clears the runway for a rate cut… but the Bank held firm.

Why? Because the economy is still a mixed bag. Inflation’s coming down, sure—but not far enough, and not fast enough. Add in Trump’s ever-shifting tariff threats, and you’ve got a cocktail of uncertainty. The Bank of Canada is keeping some dry powder in case things really hit the fan and a stronger stimulus is needed.

 

Fixed Rates: A Wild Ride of Their Own

While variable rates are directly tied to Bank of Canada decisions, fixed rates dance to the beat of bond yields—which can change direction faster than Trump’s Twitter feed.

On April 4th, Government of Canada bond yields hit their lowest point since March 2022. But just one week later, they shot up nearly 16%, forcing several lenders to hike fixed rates. Thankfully, the lender with the lowest rates held the line.

As of April 16th, bond yields have pulled back by about 5.7% from that recent peak. This relieves some of the pressure on fixed rates, which—for now—have stabilized. The lowest available 5-year fixed rate still sits at a very attractive 3.64%.*

But let’s be real—these yields are volatile. One headline, one tweet, one off-the-cuff remark from the U.S. President can send them shooting in either direction. So, if you’re timing the market, just remember: it only takes one soundbite to shake everything up.

 

My Final Thoughts

We’re in a holding pattern… but not for long. The Bank of Canada’s pause doesn’t mean the rate-cut cycle is over. It just means they’re waiting for more clarity—on inflation, tariffs, and whatever else might get thrown into the economic blender next.

And as for Trump? Let’s just say consistency isn’t exactly his brand. His trade policy seems to depend on what side of the bed he wakes up on. That’s why trying to predict rate movements right now feels more like reading tea leaves than analyzing charts.

Next stop: June 4th—the Bank of Canada’s next scheduled announcement. Will they resume cuts? Will inflation drop further? Will Trump suddenly decide tariffs are so last season? Stay tuned.

In the meantime, if you’re navigating a renewal, purchase, or just trying to make sense of where things stand, we’ve got you covered. At PMT Mortgage, we cut through the noise to help you make smart, strategic decisions based on where the market’s heading—not just where it is today.

Want to chat about your mortgage strategy? Let’s talk.

 

*The 3.64% fixed rate is available on purchases with less than 20% down, or on purchases under $1 million with 35%+ down payment. Must meet credit and income requirements. Some restrictions apply. Reach out to us directly to find out the lowest rate you’ll be eligible for.