Making sense of the Bank of Canada interest rate decision on July 30, 2025

There’s little change on the horizon for interest rates, as the Bank of Canada further entrenches into a holding pattern. The central bank chose to hold its trend-setting overnight lending rate—which is used by lenders to set their prime rates, and by extension, variable mortgage rates—at 2.75% in its latest interest rate announcement on July 30. As a result, prime rates will also remain unchanged at 4.95%.

This marks the third rate hold in a row from the Bank, following similar non-moves in June and April. Prior to this, the Bank was undergoing a cutting cycle, and had slashed its benchmark rate seven times, lowering it by 225 basis points between June 2024 and March of this year.

This most recent hold was widely anticipated by economists; the deal was roughly sealed when the June inflation numbers came in, showing consumer price growth had risen to 1.9%. Not just that, but the core measures of the CPI (called the median and trim, which strip out the upper and lower extremes of price growth) remain elevated at 3%. This is the key inflation metric watched by the Bank when making its rate decisions.

Other factors that influenced the Bank’s decision were stronger-than-expected jobs numbers, and recent business and consumer surveys that revealed the economy has been hardier than expected in the face of tariffs. 

“With still high uncertainty, the Canadian economy showing some resilience, and ongoing pressures on underlying inflation, Governing Council decided to hold the policy interest rate unchanged,” stated the press release that accompanied the Bank’s statement. “We will continue to assess the timing and strength of both the downward pressures on inflation from a weaker economy and the upward pressures on inflation from higher costs related to tariffs and the reconfiguration of trade. If a weakening economy puts further downward pressure on inflation and the upward price pressures from the trade disruptions are contained, there may be a need for a reduction in the policy interest rate.”

The Bank also released a refreshed scenario outlook; while not a formal forecast (the Bank has declined to provide one of those since the start of the trade war due to its rapidly changing narrative), it provides a few possible outcomes for the economy, depending on what happens next with tariffs. Based on the current tariff situation, the Bank says GDP growth will shrink in Q2, before recovering to 1% growth in the second half of the year. It will then recover to 2% growth by the end of 2027. This is an improvement from the previous call of 1.6% growth by the end of that horizon.
 

What the BoC’s rate hold means if you’re a mortgage borrower

The group most directly impacted by the Bank’s rate decisions are variable-rate mortgage holders. This is because variable rates, which are priced based on a plus or minus percentage to a lender’s prime rate, move in conjunction with the Bank’s overnight lending rate.

For now, these borrowers will see no change to their current interest rate, or the size of their monthly payments. The amount of their payment that goes towards interest costs and their principal loan amount, also won’t change.

If you’re currently locked into a fixed-rate mortgage term, today’s announcement won’t impact you at all; your rate is set in stone until you come up for renewal. But for those who are currently shopping around for a fixed rate, or are indeed renewing their terms, today’s rate hold could translate to higher fixed-rate pricing. This is because fixed rates are set based on bond yields; lenders use bonds as part of their capital asset mix, and when yields are low, they pass those savings down via their fixed-rate products. 

Lately, bond yields—in particular, the five-year Government of Canada bond—have been elevated, hovering above the 3% range throughout July. This is in response to investors’ malaise over stubborn inflation, as well as the persistent uncertainty from the evolving trade war. This latest hold will only reinforce investors’ inflation concerns, and it will prop up yields. As a result, fixed mortgage rates recently increased, and they could do so again, should the same conditions remain.
 

If you’re concerned about renewing your mortgage at a much higher rate—a reality for 60% of borrowers in 2025 and 2026—scoring the lowest rate possible can make a material difference. There are also other options to explore with your lender, such as temporarily extending your amortization to shrink the size of monthly payments.

Equity markets have been a wild ride since early March, when U.S. President Donald Trump first threatened to impose tariffs. After withstanding extreme volatility—including historic routs in March and April—stocks have more than recovered their losses, especially as new trade deals are announced between the U.S. and various nations. While stockholders may be cheering again today, they’ve had to absorb plenty of pain—and markets could swing again on fresh tariff threats.

In such erratic times, there’s something to be said about the predictability of passive investments. Guaranteed investment certificates (GICs) continue to be a popular option for those who want to grow their cash with as few surprises as possible. GIC rates are also linked to the prime rate and influenced by the Bank’s rate moves. Today’s rate hold means these investments remain competitively priced, at up to 5%.

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The 4 Pros and 4 Cons of Buying a Condo Instead of a House

When you’re in a position to buy a home — possibly after many years of saving up a down payment and preparing to take on a mortgage — you have a few options. For example, you can buy a single-family home, or you can buy a condo. Which should you choose?

There are good reasons to buy a condo instead of a house, but it isn’t all sunshine and rainbows. Ultimately, there are both pros and cons associated with buying a condo. 

GOBankingRates spoke with real estate professionals to assemble a list. Next, find out if buying a starter home is still an option.

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Pro: Strong Community Vibes

One pro that shouldn’t be glossed over is the strong community vibes that condos offer. Greg Clement, founder and CEO of real estate investing software company Realeflow, said this is because, in a condo, you have shared amenities and the opportunity to connect at events.

“It’s a built-in social network,” Clement said.

The cost just keep coming and surprising you.Con: Shared Space — Similar to an Apartment

Though you may appreciate the spirit of a tight-knit community, you may not appreciate that you’re in something of a shared living space.

“A condo is sort of in the middle between an apartment and a house,” said Omer Reiner, a licensed Realtor, entrepreneur and president of FL Cash Home Buyers, LLC, a real estate investment company based in Fort Lauderdale, Florida. “You are likely sharing a wall and some common outdoor areas, as you would in an apartment complex.”

Pro: Lower Prices

A major pro, if not the biggest one of all, is that condos are typically cheaper than single-family homes.

“You are likely to find a lower price tag on a condo than you might for a single-family home in the same area,” Reiner said. “You might even save some cash on the insurance bill, as well.”

Con: Fees

When you buy a condo, you’re signing up to pay fees on a regular basis. These fees vary.

“Condos have many different kinds of fees, and most condos are a part of an HOA, so you will owe HOA fees,” said Seamus Nally, CEO of TurboTenant. “I think it’s super important to consider the HOA before purchasing a condo.”

Pro: Those Fees Include Some Maintenance

Condo fees are a pain, but they do go a long way in terms of covering maintenance costs, including those associated with landscaping and trash collection.

“Though you will be paying a fee, you won’t have to worry about trimming trees or sweeping out gutters and similar tasks, as you would if you were buying a house,” Reiner said. “That can be a big draw for busy singles or families or older adults who simply cannot or don’t want to tackle those types of maintenance jobs.”

Con: Restrictions on What You Can Do With Your Space

Not only do condos often come with fees, they also come with restrictions around what you can do with your space.

“Decisions about your property are not entirely yours,” Clement said. “Want to paint your door a funky color? Better get approval.”

Pro: A Lively Location

“Typically, you will find condo locations to be highly desirable, and when buying a home, location is always key,” said James Robbins, a real estate advisor at Engel & Völkers Atlanta, which provides real estate services to the Atlanta market.

“Lots of condo buyers want to be in the hot new neighborhoods, especially if you’re new to a city,” Robbins said. “Condominiums are a really great way to enjoy a walkable lifestyle, shopping in the neighborhood, nightlife and local attractions.”

Con: Possible Pet Restrictions

Not all condos impose restrictions on pets, but many do.

“Some condo associations prohibit pets entirely,” Reiner said. 

If you have pets or plan to, make sure you don’t purchase a condo without knowing all the rules here. In fact, look into all the rules associated with owning a condo. These alone could outweigh all the pros.

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