As we wrapped up another year, I want to start by saying this:

I hope you had a wonderful Holiday — and welcome to 2026. 🎉

If the last few years taught us anything, it’s that mortgages are no longer a “set it and forget it” decision.

And that’s exactly why this year matters.

Where We’re Starting 2026 From

In December 2025, the Bank of Canada held its policy rate steady again — and more importantly, explained why.

Three themes stood out:

1. Inflation is cooling, but not evenly
2. Economic growth is slowing, not collapsing
3. Past rate hikes are still working through the system

Translation?👉 The heavy lifting is done.👉 Now it’s about watching, waiting, and managing risk.

The 2026 Interest Rate Outlook (Plain English)

Here’s the honest forecast most banks won’t put in an ad:

❌ No rapid rate cuts

❌ No surprise spikes

✅ A range-bound year

Most economists expect:

• A stable overnight rate for much of 2026
• Possible modest cuts later in the year if inflation continues easing
• Fixed rates to move before the headlines, not after

That means waiting for the “perfect” rate could cost you more than acting early.

What This Means If You’re Renewing in 2026

This is the big one.

If you locked in a rate under 2% years ago, Congratulations…and yes, 2026 is your reality check — but it’s not a disaster if handled properly.

Smart renewal strategy in 2026 looks like:

• Reviewing term length, not just rate
• Considering blended or staggered renewals
• Protecting cash flow, not gambling on cuts
• Using equity strategically, not emotionally

👉 The biggest mistake? Letting your lender auto-renew you.

Buyers: Timing Matters Less Than Structure

Waiting for rates to drop before buying rarely works.

Why?

• Prices move faster than rates
• Qualification rules don’t loosen overnight
• Competition returns before affordability headlines

In 2026, the buyers who win are the ones who:

• Get approved early
• Understand stress-test math
• Lock flexibility into their mortgage

Investors: Debt Structure Is the Real Risk

2026 separates casual investors from strategic ones.

The question isn’t:

“Will rates drop?”

It’s:

“Is my portfolio structured to survive if they don’t?”

Key focuses:

• Cash-flow buffers
• Fixed vs variable mix
• Access to equity without forced sales

The Real Opportunity in 2026

This is a planning year, not a panic year.

The clients who do best in 2026 will:

• Review early
• Ask better questions
• Stop chasing headlines

And that’s where good advice still matters.

Final Thought

Rates don’t crash markets.

Bad planning does.

If you’re renewing, buying, investing, or just want clarity — now is the time to talk strategy, not speculation.

Stuart Lessels

Your “Go To” Mortgage Broker for Georgian Bay and beyond

📧stuart@housenow.ca

📞 (705) 445-1234

Bank of Canada Holds at 2.25% — What This Means for Mortgages, Renewals, and 2026 Strategies

If you were hoping the Bank of Canada would roll into December like Santa and drop interest rates early… well, not this time.

But don’t worry — this announcement is still very good news for homeowners, buyers, investors, and anyone staring down a renewal in 2026.

Let’s break it down in plain Canadian English, with a dash of cheekiness and whole lot of “here’s what actually matters.”

🎅 Today’s Headline: The Bank of Canada Holds the Policy Rate at 2.25%

At exactly 10 a.m. (or 9:45 if they hit “publish” early — classic BoC), the Bank said:

We’re staying put.

The overnight rate remains at 2.25%, with the Bank Rate at 2.5%.

And the reason is surprisingly simple:

**Inflation is behaving.

The economy is wobbling but not falling.

And Canada is going through a massive “structural adjustment.”**

That last one — structural adjustment — sounds like something you'd hear in a chiropractic clinic, but trust me, it matters.

Let’s break down what the Bank actually said… and what it means for real Canadians with real mortgages.

🌎 1. The Global Economy Is Weird — But Stable Enough

The BoC pointed out that:

·The U.S. is basically running on AI-fuelled spending

·Europe is doing better than expected

·China is slowing down (again)

·Trade tensions are still a thing

·Oil, CAD, and global financial conditions are unchanged

In short:The world isn’t falling apart, but it’s definitely not winning any “Most Stable Economy” awards either.

🍁 2. Canada’s GDP Looks Strong… But Don’t Be Fooled

We grew 2.6% in Q3, which sounds fabulous until you read the fine print:

·Most of that growth came from trade volatility

·Final domestic demand was flat

·Q4 GDP will likely be weak

Translation:The headline number looks better than what’s actually happening on the ground.

Consumers are cautious.

Businesses are cautious.

Housing is stabilizing but still tight.

And lenders? They’re basically saying: “Show me the income, show me the stability, and we’ll talk.”

🧑‍🏭 3. Labour Market Showing “Some” Improvement

Unemployment dipped to 6.5%, and we’ve added jobs… but mostly outside sectors tied to international trade.

This means:

·The job market isn’t tanking

·But it’s not running hot enough to push inflation up

·Wage growth isn’t spiralling (a very big deal)

This is exactly the mix the Bank wants to see before cutting rates in 2026.

🔥 4. Inflation: Quietly Returning to Normal

This is the best news in the whole report.

·Total CPI = 2.2%

·Inflation has been near 2% for over a year

·Core inflation = 2.5–3%

·Underlying inflation = about 2.5%

These numbers mean something extremely important:

The Bank of Canada thinks they're finally in the “right zone.”

They even said it plainly:

“If the economy evolves as expected, the current rate is about the right level to keep inflation at 2%.”

That is as close as they get to saying:

“Hold tight — rate cuts are coming… just not yet.”

🧨 5. So Why No Rate Cut Today?

Two reasons:

Reason #1 — GST/HST base effects

A temporary bump in prices is coming because last year’s tax holiday created artificially low prices.

Reason #2 — Structural Trade Adjustment

Canada is in the middle of a global supply chain rearrangement, shifting away from old trade patterns.

This creates:

·Higher costs

·Slower growth

·More volatility

·Pressure on manufacturing and exports

The Bank wants to keep interest rates stable while this unfolds.

🎯 OK, Stuart — What Does This Mean for Mortgages?

Glad you asked. Here’s the clear, honest breakdown:

🧩 1. Fixed Mortgage Rates Likely to Stay Near Current Levels

Fixed rates follow the bond market, not the Bank of Canada.

Bond yields are stable and trending slightly downward.

Expect fixed rates to remain steady into early 2026.

Upside?Rate cuts next year will make bonds cheaper.

That means fixed mortgages will follow.

🧩 2. Variable Mortgage Rates Will Change Only When the BoC Moves

Since the Bank held today:

·Prime stays where it is

·Variable-rate mortgage payments remain unchanged

·HELOC interest remains unchanged

But…

The Bank is setting the table for 2026 cuts.

They won’t say it directly, but that’s the reality.

🧩 3. Renewals in 2026–2027: This Announcement Is Very Good News

If you're renewing in the next 18–24 months, this is what you need to know:

·Inflation has stabilized

·Rates are not rising

·The next move will likely be down

·Lenders are already sharpening pencils for early renewals

This is your moment to prepare — and maybe save thousands.

🧩 4. Investors: “Flat Market” Means Opportunity

When the economy is soft but stable:

·Sellers get realistic

·Buyers get picky

·Rents stay strong

·Lenders compete harder for solid files

If you’re waiting for a sign… This is it.

🧩 5. Homebuyers: Don’t Wait for the “Perfect” Moment

Rates may tick down in 2026, but prices will react — quickly.

Getting pre-approved now (and locking a rate) is a strategic play.

🧩 6. HELOCs: Get Them Before You Retire

A HELOC is based on income, not equity.

If you’re planning to retire in 2026 or 2027, today’s announcement means:

·Stability

·Predictable payments

·A window of opportunity

Don’t wait until you’re on fixed income to apply.

🎁 So What Should You Do Now?

Here’s your simple mortgage survival checklist:

·Check your renewal date

·Review your equity

·Consider a HELOC while income is strong

·Get pre-approved early

·Investors: start scouting now

·Homeowners: lock in rates when favourable

·And yes — ask me to run the numbers. That’s literally what I do.

💬 Final Thought

This wasn’t a flashy announcement — but it was an important one.

The Bank of Canada just confirmed:

✔ Inflation is under control

✔ The rate is at the “right” level

✔ No hikes are coming

✔ Cuts will follow stability

✔ 2026 is shaping up to be a better year for borrowers

And if you want to be ready — I’ve got your back.

Stuart...

Canada’s 2025 Federal Budget is 493 pages long. Ontario’s Fall Economic Statement adds another 220. That’s over 700 pages of government talk — and I actually read them.

Why? Because buried in all that fine print are the clues to what will happen to your mortgage, your renewal, and your buying power in 2026.

Most of the headlines focus on “record deficits.” But the real story is how those decisions shape the money you borrow and the home you live in.

1️⃣ The $78-Billion Deficit — and Why It Matters

Ottawa is spending big again — a $78-billion deficit (Budget 2025, p. 38).

That means the federal government will borrow a lot more money.

Here’s why you should care:

• When Ottawa borrows, it issues Government of Canada bonds.
• More bonds = more supply = higher bond yields.
• And bond yields are what your fixed mortgage rate is built on.

So even though inflation is cooling, the deficit keeps rates from dropping quickly.

Think of it like this: Ottawa borrows first — and we all pay the interest later.

2️⃣ Ottawa’s Forecast — Slow and Steady

In Annex 1 (Budget p. 412), the government expects five-year bond yields to average 3.3 % in 2026, just below 2025’s 3.5 %.

That points to five-year fixed mortgage rates around 4.8–5.1 %.

Translation: no crash, no spike — just stability.

And that’s actually a good thing.

It gives you time to plan, not panic.

3️⃣ The Bank of Canada and the U.S. Fed — The Slow Dance

• Bank of Canada rate: 2.25 %, on hold.
• U.S. Fed rate: 4.75 %, also holding.

Canada can’t cut rates too fast or the dollar could fall.

So, the most likely path? Small cuts in mid-to-late 2026.

Good news: no wild swings.

Bad news: no quick drop to pre-pandemic rates.

This is a time for smart planning, not wishful thinking.

4️⃣ Ontario’s Economic Update — A Real-World View

The 2025 Ontario Fall Economic Statement (A Plan to Protect Ontario) shows the province slowing but stable:

• GDP growth: 0.8 % (2025) → 0.9 % (2026)
• Deficit: $13.5 B (2025–26)
• Debt-to-GDP: stable
• 8 % HST removed for first-time buyers of new homes under $1 M
• Municipal Housing Infrastructure Fund: now $4 B
• Infrastructure plan: $201 B over 10 years

Ontario’s economy isn’t booming — but it’s holding up.

Jobs remain solid, people keep moving here, and housing demand stays healthy.

5️⃣ Housing and Affordability — Governments Still Spending

The Federal National Housing Accelerator Fund got a $7 B boost. Ontario added $4 B to help towns build faster. Plus, the new HST rebate saves first-time buyers up to $80 000.

That means the housing market will stay active, not collapse.

More support equals more confidence.

6️⃣ Your 2026 Mortgage Game Plan

7️⃣ Quick Forecast Snapshot

• 5-year bond yield ≈ 3.3 % (2026)
• Variable rates down 0.25–0.5 % by late 2026
• Ontario GDP +0.9 % (2026 projected)
• Housing starts +2–3 % (under population growth)

Bottom line → Gradual relief and balanced markets.

8️⃣ Three Smart Moves Right Now

1. Check your renewal date. You can lock 120 days out.
2. Run two rate scenarios. Flat vs -0.25 % — see the impact.
3. Stay flexible. Shorter terms or blend-to-extend options keep you nimble.

9️⃣ The Takeaway

Two budgets. 700 pages. One message: stability is your friend.

Plan ahead while others wait for a miracle rate drop.

This is your window to get ahead of 2026.

📞 Let’s chat about how these numbers fit your mortgage plan.

Stuart....

Stuart Lessels

Your “Go To” Mortgage Broker for Georgian Bay and Beyond

📧 stuart@housenow.ca 📞 (705) 445-1234

FSRA #12487 | Mortgage Alliance — Enrich Mortgage Group Ontario