What the Bank of Canada’s 2.25% Hold Means for Londoners

The news just came in from Ottawa, and for the fourth time in a row, the Bank of Canada has decided to hold steady. The key interest rate stays at 2.25%. For many of us here in London, it feels like we’ve been holding our breath for months, waiting for a sign of which way the wind is going to blow.

Look, I know how confusing this can be. One week you hear that inflation is spiking because of gas prices, and the next you’re told the economy is cooling down. The reality is that this hold is a double-edged sword for our local market. It provides a bit of predictability, which we haven't had in years, but it also means those higher borrowing costs aren't going anywhere just yet.

The Reality for London Buyers

If you are looking for a home in London right now, the strategy has shifted. While we are technically in a buyer’s market based on the statistics, sellers motivation continues to wane as they investigate their options with more homes going up for rent than we have seen in the past. Your monthly payments aren't dropping tomorrow, but neither is the competition for that three-bedroom in Wortley Village.

Here’s the thing: inventory is sitting at nearly five months of supply. That matters because it gives you time. You don’t have to rush into a decision or waive your inspection within twenty minutes of a viewing. However, affordability is still a hurdle. Many local buyers are opting for shorter-term fixed rates because they hope for a drop in 2027. It’s a calculated risk, and there is no perfect answer.

What Sellers Need to Hear

For sellers, the market requires a lot more patience than it did two years ago. We are seeing average prices in London sit stead with minimal movement on values month over month. That is a significant adjustment from the peaks of the past.

If you are putting a sign in the yard today, you have to be realistic. Homes are staying on the market anywhere between 20 to 40 days before being sold. Buyers are picky because their money is expensive to borrow. They are looking for value, and they aren't willing to overlook the small stuff anymore. A hold at 2.25% means the pool of buyers remains smaller and more cautious.

Making the Move in the Forest City

London is a resilient place, but we are definitely in a wait and see period. Whether you are moving across town or trying to get your first set of keys, the best thing you can do is look at your own math rather than trying to time the national economy. We don't know for sure when the next cut will come, and we can’t control global oil prices or trade tariffs.

We can, however, control how we negotiate and how we prepare. Focus on your long-term goals. If the house fits your life and the payment fits your budget, that is usually the right time to move.

Conclusion

A fourth consecutive rate hold brings a sense of stability, but it doesn't solve the affordability puzzle overnight. In London, we are navigating a market that favors those who are prepared and patient. Whether you’re buying or selling, the focus should be on clear data and realistic expectations.

Here is what you need to know

1. Does the rate hold mean home prices will stay flat in London? Not necessarily. While rates affect demand, our local inventory levels play a bigger role. Currently, more supply is keeping a lid on price growth.

2. Should I go with a variable or fixed mortgage right now? That depends on your sleep at night factor. Many Londoners are choosing 2 or 3-year fixed terms to bridge the gap until the Bank of Canada eventually begins to cut.

3. Is London still a buyer’s market? Yes and No. With a sales-to-new-listings ratio below 40%, buyers currently have more negotiating power and more options to choose from while sellers dig their feet in the sand as they come to grips with the current market reality.

4. Will rates go up again this year? Most analysts expect the Bank to stay parked at 2.25% for the rest of 2026, though they are watching inflation closely. There are slight rumblings of possible increases as world issues continue to affect the global supply chain.

5. What is the average time to sell a home in London right now? On average, homes are taking about 20 to 40 days to sell, provided they are priced correctly for the current conditions.

Let’s Talk About Your Move If you’re trying to figure out how these rates impact your specific budget or your home’s value, reach out. We can grab a coffee and look at the numbers together. No pressure, just a real conversation about what makes sense for you.