After a streak of seven consecutive rate cuts, the Bank of Canada has hit the pause button… not once, but twice. With the next announcement set for July 30, the mortgage world patiently (or impatiently) awaits.

Will the BoC resume its cuts?

Will they pause for the third time in a row?

Or are we in for a plot twist that no economist saw coming?

Let’s break down the latest forecasts from Canada’s Big Six banks… and more importantly, what all of this means for your mortgage strategy as we head into the back half of 2025.

 

Interest Rate Forecasts from Canada’s Big Six Banks

Bank Last Report Q3 2025 Q4 2025 Q1 2026 Q2 2026 Q3 2026 Q4 2026 Total Change
CIBC Jun 9 -0.50% N/C N/C N/C N/C N/C -0.50%
RBC June N/C N/C N/C N/C N/C N/C -0.00%
Scotia Jun 11 N/C N/C -0.25% -0.25% N/C N/C -0.50%
TD June -0.50% N/C N/C N/C N/C N/C -0.50%
BMO Jun 13 -0.25% -0.25% -0.25% N/C N/C N/C -0.75%
NBC June -0.25% -0.25% N/C N/C N/C +0.25% -0.25%

‘Last Report’ indicates when the forecast was updated. RBC, TD and National Bank (NBC) only provide the month. 

There have been a few notable changes since my last rate forecast update.  RBC was previously expecting a 0.25% rate hike at the end of 2026, which they have since removed and are now forecasting no more movement through to the end of 2026. 

National Bank has added a 0.25% hike in the final quarter of 2026. 

Scotiabank dialed back their expectations, removing a third rate cut they had previously pencilled in for next year.  

BMO stands out as the most optimistic, now expecting a 0.25% cut in early 2026 after previously calling for no further movement next year. 

 

Upcoming Dates to Watch

There are four remaining Bank of Canada announcements in 2025:

  • July 30
  • September 17
  • October 29
  • December 10

While those dates are locked in, the rate forecasts definitely are not. Markets react to data, and central banks react to markets. That means economic reports between now and then can shift the narrative fast. There are five scheduled prior to the next announcement on July 30th:  

  • June 24th – Canadian CPI / Inflation  
  • June 27th – Canadian GDP 
  • July 11th – Canadian Jobs  
  • July 15th – Canadian CPI / Inflation 
  • July 15th – US CPI / Inflation 

Each of these could move the needle.

Inflation comes in cooler than expected?  Bond yields would be expected to drop, pulling fixed mortgage rates down and increasing the likelihood of another BoC cut.

Employment comes back strong?  This means wages rise and Canadians have more money to spend, which fuels the economy. While generally a good thing, this is not what the Bank of Canada is hoping to see at this time. As core inflation has been on the rise, a strong employment report could fuel it further, leading to the Bank of Canada holding their rate once again. 

 

The Impact of Rate Forecasts on your Mortgage Decisions 

Rate forecasts can be helpful, but they’re not a crystal ball. In this kind of environment, choosing between fixed and variable isn’t about trying to “guess right”—it’s about choosing the option that best fits your comfort level and risk tolerance.

Yes, variable rates might win out if rate cuts pick up again. But we’re living in an era of extreme volatility… economic, geopolitical, and otherwise. That’s why more Canadians are leaning toward 3 and 5-year fixed options for the peace of mind they provide.

But that doesn’t mean variable is off the table. For some, it still makes sense. Just understand: 

  • Lower rates aren’t guaranteed
  • One inflation spike can change everything
  • Every mortgage choice is a calculated risk

As I mention in my book, Beat the Bank, the best choice isn’t always the one that saves you the most money. It’s the one that allows you to sleep soundly at night. It doesn’t matter what your friends, family or neighbours are doing. What’s right for them may not be right for you. Everyone is coming from a different financial position, with different goals and tolerance for risk. This is why I’m always saying there is no one size fits all mortgage advice. 

 

Final Thought

Forecasts will keep changing, headlines will keep shifting, and the BoC will do what it does. But your decision doesn’t have to hinge on tomorrow’s headlines. It should be based on your unique situation today.

If you’re unsure what the right move is for you, let’s talk it through. We’ll help you navigate the noise and zero in on the strategy that fits you… not the crowd.