01 Aug Bank of Canada Holds Rates at 2.75%: What It Means for BC Homebuyers and Homeowners

On July 30, 2025, the Bank of Canada announced that it will maintain its key overnight rate at 2.75%, marking the third consecutive hold since April. This decision reflects the Bank’s cautious approach as inflation trends downward but remains above the 2% target. For homebuyers and homeowners in Abbotsford, Surrey, and surrounding areas, this means more stability in borrowing costs, though questions remain about the timing of future rate adjustments.

Understanding how this affects your mortgage strategy—whether you are buying, renewing, or refinancing—is critical.

Why Did the Bank of Canada Hold the Rate?

The decision to keep the policy rate at 2.75% is rooted in mixed economic signals. Inflation has continued to ease, hovering around 2.3%, but wage growth and core inflation indicators remain persistent. The Canadian economy is experiencing a soft landing: modest GDP growth and a slight uptick in unemployment, particularly in sectors like construction and retail.

The Bank emphasized that while further cuts may be on the table in the coming months, it wants to avoid premature easing that could reignite inflationary pressures.

For those following our insights on navigating mortgage rates in Surrey, this decision is consistent with predictions that the BoC would maintain its cautious stance heading into the second half of the year.

What This Means for Fixed and Variable Mortgage Rates

If you’re considering a new mortgage or planning a renewal, the hold at 2.75% has different implications depending on your mortgage type:

Fixed-Rate Mortgages:
Fixed rates, driven by bond yields, have been trending downward over the past few months. With bond yields stabilizing, we’re seeing fixed mortgage rates continue their modest decline. As discussed in our recent analysis on locking in your mortgage rate before BoC announcements, this could be an opportune moment to secure a rate before further market shifts.

Variable-Rate Mortgages:
Variable-rate mortgage holders will benefit from the continued hold, as their rates remain unchanged. However, with speculation of a possible cut later this year, staying variable could offer additional savings if the BoC decides to lower rates in its September or October announcements.

How This Impacts Abbotsford and Surrey’s Housing Markets

The Fraser Valley market has shown signs of renewed activity in recent months. Abbotsford is seeing increased first-time buyer interest, thanks to improved affordability from slightly lower fixed rates. In Surrey, the demand for detached homes and townhomes remains strong, especially among growing families and newcomers.

By maintaining rates, the Bank of Canada is effectively providing breathing room for these markets to stabilize. As affordability improves gradually, we anticipate an uptick in listings and sales through the fall.

For first-time buyers, reviewing resources like our ultimate guide to first-time home buyer mortgages in BC can help in navigating available programs and incentives, especially with the GST exemption for new builds still in effect.

Should You Buy, Renew, or Refinance Now?

This rate hold creates a unique window for decision-making:

• Homebuyers: This may be the time to explore pre-approvals, locking in a competitive fixed rate while the market is still favorable.
• Homeowners renewing: If your mortgage is up for renewal in 2025, staying informed about the complete mortgage renewal process is essential to avoid surprises.
• Refinancers: Lower fixed rates could make this a good opportunity for refinancing, especially for consolidating high-interest debt or accessing equity.

Understanding your options is key to maximizing the benefits of this stable rate environment.

What Should You Expect Next?

With the next policy announcement scheduled for September 17, market watchers are split on whether the Bank will begin another round of easing. While inflation trends are encouraging, the Bank remains concerned about the long-term impact of wage growth and global economic volatility.

In the Fraser Valley region, this uncertainty means both buyers and sellers will be closely monitoring mortgage rate movements. As we discussed in our mortgage strategies for a 2.75% rate environment, aligning your financing decisions with these announcements can be a major advantage.

Key Takeaways for Abbotsford and Surrey Residents

1. Affordability remains a challenge, but stability in rates combined with easing fixed-rate mortgages offers opportunities for first-time buyers.
2. Variable-rate mortgage holders can stay the course while monitoring for potential cuts later this year.
3. Homeowners with upcoming renewals should actively review options with their brokers well before their term ends.
4. Investors and refinancers can benefit from the slightly declining fixed-rate environment for equity-building and restructuring debt.

If you’re unsure which strategy works best for you, connecting with a trusted mortgage professional who understands the Abbotsford and Surrey markets can help you navigate these decisions confidently.

FAQs

1. Will the Bank of Canada cut rates in 2025?
   It’s possible. Economists expect at least one rate cut before the year ends if inflation continues to decline. However, this will depend on upcoming economic data and global trends.
2. How does this decision impact fixed vs. variable mortgages?
   Fixed rates are influenced by bond yields, which have been easing, leading to gradual declines. Variable rates remain tied to the BoC’s key rate, so they stay unchanged for now.
3. Is now a good time for first-time buyers?
   Yes, with rates stabilizing and home prices showing moderate growth, this could be a favorable entry point. Programs like the GST exemption on new builds further improve affordability.
4. Should I refinance my mortgage now?
   If you have high-interest debt or want to access equity, refinancing while fixed rates are relatively low could be beneficial. Review our complete guide to mortgage refinancing in BC for more insights.
5. What’s the best way to prepare for a mortgage renewal?
   Start early—review your current terms, compare lender offers, and work with a broker to negotiate better rates. Our mortgage renewal guide outlines key steps.

Need expert guidance? Whether you’re buying, renewing, or refinancing in Abbotsford, Surrey, or nearby areas, contact us to explore the best mortgage options tailored to your goals.