Are Interest Rates About to Rise Again? (LOCK IN NOW!)
The Bank of Canada is currently holding its policy rate at 2.25%, with its next decision scheduled for October 28.
UBS is now predicting a 0.25% increase in October, followed by another increase in January 2027. However, this is only one forecast—not a guaranteed outcome.
The Bank of Canada faces a difficult decision. Inflation remains a concern, but Canada must also deal with slower economic growth and continuing trade uncertainty. My prediction is that a small rate increase is becoming more likely, but any increases will probably be gradual rather than aggressive.
For the housing market, higher rates could reduce buyers’ purchasing power and increase the cost of variable-rate mortgages. Fixed mortgage rates may also rise, although they are influenced more directly by bond yields.
At the same time, interest rates alone cannot solve Canada’s housing-affordability problem. Lower rates can increase demand and push prices higher, while higher rates make it harder for buyers to qualify. The long-term solution must include more housing supply, faster approvals and better infrastructure.
Buyers and sellers should not try to perfectly time the market. The better approach is to understand the numbers, prepare for different rate scenarios and make decisions based on personal needs and long-term plans.
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