In its final rate announcement of 2025, the Bank of Canada decided to hold its policy interest rate steady at 2.25%. This rate hold impacts mortgages, housing demand, and market confidence, shaping opportunities for both buyers and sellers in Toronto.
Stability for Buyers & Confidence in Planning
A rate hold means that, for now, borrowing costs remain predictable. For those with variable-rate mortgages, or planning to get one, monthly payments won’t suddenly jump.
That predictability allows buyers to plan their budgets with confidence. For first-time buyers or anyone looking to move, it removes a major uncertainty: “Will my mortgage payment spike next month?”
Even with rates steady, buyers can take advantage of the current market to make strategic moves. The rate hold creates an opportunity to secure a mortgage under stable conditions, making it an ideal time to step into the Toronto real estate market.
What It Means for Sellers & Renewed Interest
For sellers, a rate hold can spark renewed buyer interest. Stable borrowing costs encourage buyers to actively explore homes, which can translate to consistent demand.
Although the market is adjusting gradually, Toronto’s desirable neighbourhoods remain attractive to buyers. Limited supply in central areas may help maintain strong interest and pricing, creating a favourable environment for sellers.
What Buyers and Sellers Should Keep in Mind
A rate hold doesn’t mean prices will drop, but it provides breathing room. Buyers can approach the market with confidence, knowing that mortgage payments are stable. Sellers can test the waters and engage with motivated buyers in a market that is showing signs of steady activity.
Affordability remains an important consideration, but current market conditions offer opportunities for buyers and sellers alike. Inventory and economic trends will influence outcomes, but the rate hold provides a foundation of stability that makes planning easier.
Strategy: Steps for Moving Forward
For buyers, take advantage of the rate hold to plan and budget carefully. Consider getting pre-approved and focus on long-term affordability, including maintenance, property taxes, and future financial planning.
For sellers, the rate hold can signal that now is a good time to list. With steady borrowing costs and renewed buyer interest, listing strategically may provide a competitive advantage. Strong pricing and motivated buyers create a positive environment for selling.
What This Means for Toronto’s Real Estate Market in 2026
With the Bank of Canada holding rates steady, Toronto’s real estate market is gradually recalibrating rather than experiencing dramatic shifts. Buyers gain confidence, sellers can test demand, and the market is positioned for measured, steady growth. How prices move will depend on inventory, economic conditions, and household responses to market dynamics, but the rate hold ensures a foundation of stability for everyone considering a move.
Have questions about what this means for your real estate plans? We’re happy to help! Reach out to us anytime.
Get To Know Wright Sisters Group
Discover the expertise behind the team with 100+ years of combined Toronto real estate experience.
