Interest Rates May Be "On Hold" — But the Real Risk Starts After

If you've been waiting for certainty on interest rates, here's the truth: We're not getting it — and that's actually the point. According to Canadian Mortgage Trends, Canada's Big 6 banks are aligned on one thing and divided on the part that matters most. All six expect the Bank of Canada to hold the policy rate at 2.25% through 2026.

After that? The forecasts split — sharply.

Let's break down what's really happening, and why this matters if you own, are buying, or are financing real estate in London, Ontario.

The Calm Before the Fork in the Road

On the surface, a rate "hold" sounds comforting. No hikes. No surprises. No panic. But here's the nuance most headlines miss:

Stability now doesn't equal stability later.

By 2027, the Big 6 are divided straight down the middle:

Three banks expect rate hikes:

• National Bank: First hike as early as late 2026, reaching 2.75%
• Scotiabank: Gradual increases toward 3.00% by end of 2027
• RBC: Most aggressive, forecasting 3.25% by Q4 2027

Three banks expect rates to stay flat at 2.25% through 2027:

• TD
• CIBC
• BMO

No consensus. No clear path. Just a widening range of possible outcomes. That uncertainty — not today's rate — is what buyers and homeowners need to plan around.

Why This Matters More in London Than You Might Think

London isn't Toronto, but we don't operate in a bubble either. Over the past few years, London has seen:

• A surge in variable-rate mortgages
• Heavy use of HELOCs for renovations, investments, and lifestyle spending
• Buyers stretching affordability during the low-rate years of 2020–2022

Here's the key exposure point: Variable mortgages and HELOCs move with prime — not headlines.

Even a small shift matters. A 0.25% rate move typically changes payments by about $12.50 per month per $100,000 of mortgage debt. That doesn't sound dramatic — until you scale it:

• $500,000 mortgage → ~$62.50/month
• $700,000 mortgage → ~$87.50/month
• Combine that with rising insurance, condo fees, or taxes, and cash flow tightens quickly

This is why "rates are stable" can be a misleading comfort.

What This Means for You — Practically

If you're buying: Today's rates may hold, but you should be qualifying and budgeting with future flexibility in mind. Fixed vs. variable isn't just a math decision — it's a risk-tolerance decision. The cheapest option isn't always the safest.

If you already own: This is the window to review your mortgage structure. If you're variable or heavily leveraged through a HELOC, it's worth stress-testing your numbers now — not when policy changes force the issue.

If you're investing: Cash flow matters more than appreciation right now. Rising supply, softer rents, and uncertain rates mean conservative underwriting beats optimistic assumptions. The deals that work in this environment are the ones built to survive multiple scenarios.

The Bigger Picture

The Bank of Canada holding at 2.25% isn't a green light — it's a pause. And pauses are where smart strategy gets built. The biggest risk isn't getting the rate call wrong. It's building a plan that only works if everything goes perfectly.

If you're planning a move, refinancing, or restructuring in the next 6–18 months, the conversation to have now isn't "Will rates go up?" It's "What happens to my plan if they do?" That's where real confidence comes from.

Helping you make the right move — not just the comfortable one.