What was the Announcement?
This morning, the Bank of Canada maintained the overnight rate at 2.75%. While markets were divided on whether we’d see another cut, the Bank chose to hold steady in light of growing global trade uncertainty—particularly stemming from the U.S. tariff escalation.
Governor Tiff Macklem made it clear: this decision is not about being done with rate cuts, but about waiting for clarity. The Bank is currently navigating what it calls “considerable uncertainty,” and highlighted several risks:
- Tariffs and Trade Policy Volatility: Ongoing U.S. tariff threats and global trade tensions are making it increasingly difficult to forecast inflation and GDP growth.
- Dual Scenarios: The Bank released two economic scenarios—one assumes minimal tariffs and mild disruption, the other outlines a year-long recession triggered by a full-scale trade war.
- Uncertainty Above All: The Bank emphasized that these scenarios are not forecasts, but examples of the wide range of outcomes they must prepare for. Despite recent economic softness, the Bank is concerned that acting too quickly in either direction could mismanage inflation or stall recovery efforts.
How Does it Impact You?
Fixed-Rate Borrowers: While the Bank held the policy rate today, fixed mortgage rates continue to be influenced by bond market movements. With ongoing uncertainty, rates remain low. If your mortgage is up for renewal, this could still be a strong time to secure a better rate.
Variable-Rate Borrowers: Today’s hold means the prime rate remains unchanged. However, after seven prior rate cuts, variable mortgage holders are still enjoying significantly lower payments than a year ago. There’s a strong chance further cuts may be ahead, depending on how global trade tensions unfold.
Renewals & Refinancing: The Bank’s decision to pause highlights the importance of reviewing your current mortgage strategy. Whether you’re renewing or refinancing, this uncertain environment requires careful planning around term selection, rate strategy, and cash flow management.
Where do we go from here?
While the Bank has paused rate cuts, it made it clear this is a temporary stop. They are continuing to assess:
- Inflation Pressures: Short-term inflation expectations are rising, mostly due to fears around supply chain disruptions and rising costs tied to tariffs.
- Economic Growth Risks: Weaker business and consumer confidence, slowing employment growth, and softer retail and real estate activity are all being closely monitored.
- Global Factors: The outcome of U.S. trade policy, supply chain adjustments, and currency fluctuations will weigh heavily on the Bank’s future moves.
The next Bank of Canada meeting is scheduled for June 4th, and current market pricing shows nearly even odds of another 25-basis-point cut. We’ll be watching closely—and providing updates as things unfold.
Current Opportunities
At Pilot Mortgage Group, we’re actively working with clients to identify opportunities to optimize their mortgage and financial position in this evolving market. Here’s how we can help:
- High Fixed-Rate Mortgages: If your mortgage is currently in the 5%–6% range, there may be an opportunity to refinance and secure a lower rate—potentially saving you thousands in interest.
- Debt Consolidation: If you’re carrying high-interest consumer debt, we may be able to help improve your monthly cash flow by rolling this into a lower-rate mortgage solution.
- Mortgage Renewals: With interest rate paths more unpredictable than ever, selecting the right product and term can protect you from volatility and future payment shocks. Let us help you map out the right strategy.
If you'd like a personalized review of your current mortgage or financial goals, we’re here to help.
A Quick Refresher: VIP Mortgage Management Program
Last month, we introduced our VIP Mortgage Management Program—a proactive, value-added service designed to help our clients stay ahead of market changes and make the most of their mortgage.
As a reminder, VIP clients receive:
✔️ Monthly property value updates
✔️ Mortgage reviews for potential interest savings
✔️ Assessments of move-up potential or equity access
If you haven't enrolled yet but would like to take part, simply book a calll or contact our team directly. We'd be happy to include you in the program and help you stay one step ahead.
