Interest Rates Holding Steady: What London Home Buyers Need to Know in 2025

Why Rate Hikes Are Off the Table—And What It Means for Your London Home Purchase

If you've been watching interest rates nervously, there's reassuring news: economists now expect the Bank of Canada to hold its policy rate at 2.25% through the rest of 2026. For London, Ontario buyers and homeowners, this stability creates a window of opportunity worth understanding.

The Labour Market Story Behind Stable Rates

Canada's job market is showing signs of softness that make rate hikes difficult to justify. The numbers tell the story:

- Just 14,000 jobs were added in March, following losses of nearly 110,000 across January and February - National unemployment holds at 6.7% - Full-time employment has dropped 40,000 over six months, while part-time positions rose by 80,000 - Financial services alone cut nearly 20,000 jobs between February and March

This labour market weakness gives the Bank of Canada reason to maintain current rates rather than push them higher.

What Stable Rates Mean for London Buyers

For those house-hunting in neighbourhoods like Byron, Westmount, or near the shops along Commissioners Road, predictable borrowing costs make budgeting more straightforward. You can calculate your monthly payments with greater confidence, knowing dramatic rate increases are unlikely in the near term.

Here's how to leverage this stability:

Lock In Your Mortgage Strategy

With rates expected to hold, now is an excellent time to get pre-approved and understand your true purchasing power. Whether you're eyeing a starter home near Fanshawe College or a family property in the Summerset neighbourhood, knowing your numbers is step one.

Consider whether a fixed or variable rate mortgage suits your risk tolerance. In a stable rate environment, variable rates may offer modest savings, though fixed rates provide certainty many London families prefer.

Plan for the Long Term

Stable rates don't mean stagnant rates forever. If you're considering purchasing, waiting indefinitely in hopes of significant rate drops may not serve you well. London's market, while more balanced than recent years, continues to see steady demand in desirable areas.

Properties near Western University, along the Thames River, or in established communities like Old North maintain their appeal regardless of short-term rate fluctuations.

A Word of Caution

While lower rates support housing demand on paper, the same job market weakness affecting rate policy also affects buyers. Fewer full-time paycheques and employment uncertainty can make qualifying for mortgages more challenging.

If your employment situation is solid, this may actually work in your favour—less competition from buyers facing income disruptions.

For Current Homeowners

If you purchased during the higher-rate period and your mortgage renewal is approaching, stable rates offer hope for relief. Speak with your mortgage professional about renewal options and whether refinancing makes sense for your situation.

Homeowners in London considering renovations or secondary suites may also find current borrowing costs manageable for home equity lines of credit.

Moving Forward with Confidence

The intersection of stable rates and a balanced London market creates favorable conditions for thoughtful buyers. Whether you're purchasing your first home, upgrading to accommodate a growing family, or investing in London's rental market, the financial landscape is more predictable than it's been in years.

Ready to explore what's possible in London's diverse neighbourhoods? Connect with Nickey Calford and the Calford & Co. Real Estate Team to discuss your goals and create a plan that works for today's market conditions.