The Bank of Canada pumped the brakes on its cutting cycle today, announcing a rate hold after two consecutive cuts. This maintains the overnight lending rate at 2.25% and suggests the Bank is taking a more cautious approach going forward.
In its October rate cut announcement, the BoC signaled that the 2.25% policy rate was currently at the “right level” to keep inflation close to the 2% target. Therefore, unless projections change, the Bank is likely to maintain the rate at 2.25% for the foreseeable future.
Heading into the typically quieter winter real estate market, home buyers may find this a good window of opportunity to browse for homes. This timing is beneficial, especially before the predicted busy spring 2026 market, when many buyers may finally come off the sidelines, increasing competition.
What to Expect in the Winter 2026 Real Estate Market
Colder weather typically translates to fewer home sales. While most home buyers wait for the spring market, there are always motivated individuals who need to move due to work, family, or educational reasons. These buyers will find favourable conditions in many cities, particularly in markets that were once “red hot.”
A recent Zoocasa report found that the Greater Toronto real estate market is firmly in buyers’ territory, meaning that buyers will benefit from a surplus of choice, lower home prices, and greater negotiating power. The latest TRREB (Toronto Regional Real Estate Board) report reaffirms this, with the average property days on market (PDOM) for the region sitting at 56 days. This slow pace of sales gives buyers ample time to browse and avoid being rushed into decisions.
Greater Vancouver, Kitchener-Waterloo, Ottawa, and Calgary are all currently balanced markets. Buyers in these cities can expect a less competitive environment, while sellers can enjoy a steady stream of demand.
Penelope Graham, mortgage expert at Ratehub.ca, expects buyer demand to pick up in the coming months, offering those able to buy now a strong incentive to purchase before the anticipated spring surge.
“While Canada’s housing market continues to lag last year’s levels, buyer demand has edged up steadily over the past six months,” says Graham. “Home prices, meanwhile, have yet to re-heat, and plenty of available inventory has made for buyer-friendly conditions in most Canadian markets. While economic uncertainty continues to impact buyer psychology, today’s relatively good affordability conditions will continue to support slow market recovery.”
Where Interest Rates Are Heading
“Given the Bank’s stance and economic landscape, it’s unlikely variable mortgage rates will decrease in the near future,” says Graham. “However, current variable rate pricing is still the best it’s been since 2022, with five-year terms as low as 3.45%. Fixed mortgage rates are also still very competitively priced, though are now facing upward pressure as bond yields climb.”
Rising bond yields have recently driven up fixed mortgage rates, with the best available fixed rate, according to Ratehub, now at 3.89%. This rate hike significantly increases the cost of homeownership. A buyer purchasing a house at the national average price of $690,195 must now expect a higher monthly payment of approximately $2,872 (assuming a 20% down payment and a 25-year amortization).
For those entering the market soon, locking in a pre-approval is a critical step. As the market remains highly sensitive to economic data and central bank policy, securing your rate now is the best hedge against future uncertainty.
Considering a move this year? It doesn’t hurt to start looking. Browse thousands of listings on Zoocasa and explore what’s possible in today’s market.
