Bank of Canada rate freeze opens door for buyers and sellers: experts
By: Joshua Santos | BNNBloomberg.ca
TORONTO, December 10, 2025
Stability in interest rates reduces uncertainty when Canada and the United States are locked in a trade war, real estate professionals say.
The Bank of Canada decided to hold its latest interest rate decision Wednesday at 2.25 per cent, which mortgage specialists say benefits home buyers and sellers in several ways.
“The economy is not booming, but it’s not in crisis mode,” Shawn Zigelstein, broker for Royal LePage told BNN Bloomberg in an interview. “Prices have come down in the major centres, but by the Bank of Canada holding this rate, what they’re trying to do is create economic stability.”
Homebuyers face a predictable environment without fear of sudden price hikes while home sellers, he said, may be willing to negotiate and close deals.
“I think this is a great time for first time homebuyers,” said Zigelstein. “You’ve got the ability to get into product that has come down in price significantly within the GTA, you’ve got lower borrowing costs, and you’ve got some sellers out there that are looking to unload some properties. It’s not to say it’s a fire sale by any means, but what it does tell people is we’re willing to negotiate.”
Hold on interest rates to provide predictable mortgage rates
Penelope Graham, mortgage expert at Ratehub.ca said home prices have yet to re-heat and plenty of available inventory has made for buyer-friendly conditions in most Canadian markets.
She said affordable conditions continue to support slow market recovery despite economic uncertainty.
“Given the Bank’s stance and economic landscape, it’s unlikely variable mortgage rates will decrease in the near future,” said Graham. “Fixed mortgage rates are also still very competitively priced, though are now facing upward pressure as bond yields climb.”
Homeowners renewing their mortgage next year won’t face sudden or extreme increases in rates which could hurt less, Zigelstein said.
“The advantage is renewals are still going to sting for some of those people who were in the market five years ago for a mortgage and locked in at that point,” said Zigelstein. “However, the sting is going to be considerably less than it would have been if rates had stayed much higher, which is what they were.”
Reading said homeowners may benefit with a variable rate mortgage rather than a fixed rate but only in the short term.
“I think that they’re thinking that at least in the short term, things have settled down a little bit,” Reading said. “If things do continue to stabilize maybe they look at locking in at some point down the road, but they may not want to make a longer-term mortgage decision.”
Real Estate Investment Trust continue to struggle despite low interest rates
Low interest rates make it cheaper to purchase Canadian Real Estate Investment Trust (REITs) which finance property purchases and real estate development. But the types of REITS that have a portfolio of condominiums, detached homes and semi-detached houses continue to struggle due to economic uncertainty.
“There’s quite a bit of availability of condos in existing buildings, and they’re generally priced a bit better but generally, I think the condo market is going to be pretty soft I would say into 2026,” said Reading. “In terms of single-family homes, it’s the same thing. There’s just so much uncertainty that.”
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