Bank of Canada Update: January 28th

The Bank of Canada has decided to keep its key interest rate at 2.25%, a move that aligns with economic projections and expectations.

Dan Ahlstrand
I know many of you were watching the Bank of Canada today as they laid out their guidance for the next few months about what’s going to happen with the interest rate, and the Bank of Canada has decided to hold its key interest rate steady at 2.25%, and of course, that doesn’t really catch many people by surprise. It’s what economists, and I think our next guest, told us on the last edition of Mortgage 101. And that, of course, is our mortgage guru, Clinton.

Clinton Wilkins,
Thanks for having me, Dan. How’s your day going?

Dan Ahlstrand
Not too bad. It’s these don’t have to go on the shovel, right?

Clinton Wilkins
Yeah, this is true. I’m in Vancouver this week, actually, for a mortgage Summit. I avoided the weather, so I got out before this last dump of snow, which was great. But interestingly enough, one of the speakers at the summit yesterday was Stephen Poloz, as the former governor of the Bank of Canada, so I certainly was able to hear his two cents’ worth on where things are going here with the Bank of Canada and what’s going on in the economy.

Dan Ahlstrand
I think the last time we talked, Clinton, you had suggested that you thought the Bank of Canada was going to hold this time around, and lo and behold, they did.

Clinton Wilkins
It was not a surprise for me and the economists were projecting it. The thing is, Dan, the economists are all over the place. And the one thing that I really took home yesterday from the summit was expect the unexpected. We’re almost in this reality TV environment now with what’s going on in the economy, what’s going on in the US, trade, inflation and GDP. The one word that kept coming up was stagflation. We always talk about a recession. And, what does a recession look like? Are we in a recession? Is the economy softening? But they kept on using this word stagflation, and that might be the theme here for the next couple of months.

Dan Ahlstrand
So now that Tiff Macklem has made this, this pronouncement that they’re going to hold their key interest rate at 2.25, what does that mean for people who are holding a mortgage?

Clinton Wilkins
Well, their cost of borrowing is going to be stable. I don’t think the cost of borrowing is the issue here. Dan, I think we’re in a better place than we were two years ago. Would I love people to have all their interest rates start with a three or start with a two? Yeah, that would be great. But we’re not in a rate environment that is going to stimulate or suppress, I think, what’s going on right now? By and large, Canadians can afford the cost of borrowing. We’re certainly doing a lot of mortgages. Last year was our best year ever in terms of transaction count. We’re kind of in this stable place. And I think being in a place where it is a plateau, consumers can start making some decisions on, if they’re going to buy another property, if they’re going to refinance, h theirmortgage coming up for renewal, they can plan on, where things are going again. Things can change tomorrow as we know with the relationships, even with the US, things that are certainly volatile. But I think being in a more plateau situation can give some people ease. And know, really, what to expect at least the next little period of time. The one thing I will say is more and more consumers are choosing to take a variable rate again, Dan, primarily because most variable rate mortgages are at a lower borrowing cost than a fixed I think by and large, Canadians overall feel that, if we do go into a recession type situation, the Bank of Canada will lower the key overnight rate and the cost of boring will become less obviously, there are some big pros. With a variable rate mortgage, you can always convert it into a fixed rate if you need to, and if you do need to break that mortgage early, it would be a cost of only three months’ interest to get out. So certainly, pros and cons, I think everybody’s situation is different, but I think being in a plateau overall, I thinkit is a little bit easier to plan than a more volatile rate environment.

Dan Ahlstrand
As part of the announcement, the Bank of Canada said that it expects the economy to stall in the last quarter of last year, but is also expecting to recover over the next couple of years. Thosewho are maybe looking to refinance their mortgage, or those who are looking to perhaps get into the housing market. What are you expecting for the next quarter and the remainder of 26?

Clinton Wilkins
I’m watching the job numbers, I’m watching GDP, and I’m watching inflation. Those are the things that I’m really watching. For me, I love a variable rate mortgage. I’m in the mortgage business. I’m watching it every day. Not every consumer has us to give them the advice, watch it and tell them if they need to do something different. I can tell you that a lot of consumers are choosing to do that variable just because. Because we feel the rates will be less, the one thing that we even talked about last year on our show, Dan, the best time to do a transaction, oftentimes, is yesterday. The people that are coming up for renewal, we see a lot of folks these days that we did mortgages for three years and five years ago, and they’re coming out of either higher or lower interest rates into a different rate environment than they were used to. I think it’s so important when you’re doing a transaction to seek the advice of an unbiased mortgage professional. Not every mortgage is the same, and you just don’t renew with your existing lender. I think it’s a good time to look at your finances. We’re still talking about getting married at my stand. I know that was our show this month, but it’s a great time to take control of your personal finances. And, we’ve got through the holidays. We’re almost through January. Spring is going to be around the corner, but 2026 is a great time to really focus on financial health and wellness. And obviously, mortgage lending is a big piece of that for people who own a home or want to own a home in the future.

Dan Ahlstrand
Clinton, I was off for the last couple of weeks, and had an opportunity to get out and wander around HRM and take a look around, and saw a good, I guess, a healthy number of for sale signs on people’s yards. What’s the market like right now? And what do you expect that to be moving into the summer?

Clinton Wilkins
Well, if we’re talking about all of Canada, there certainly has been a softening. I think prices overall are down about 20%, that’s not the story in Halifax, and it’s not the story in Nova Scotia. Our prices are up or somewhere, about 3%, Dan, that is, we can deal with it. We have more demand here than we have supply, but there’s certainly more supply coming on hand. I’m cautiously optimistic. I think it’s going to be a great year in real estate and in mortgage finance. Certainly, the demand is very high. And, I think there were some buyers the last couple of years that were sitting on the fence because A, there was no supply, but B, with the rates being high, just the uptick, sometimes of a transaction didn’t make sense for folks this year, where rates are being more stable, more inventory. I think we’re going to see a lot of activity in the real estate market. And I think we’re going to see more listings going in to march. Typically, we see a big uptick when we talk like week three, week four, March, that’s when we start seeing a lot of traction in the marketplace.

Dan Ahlstrand
What are you expecting the prices to do? Or are we going to hold steady? Are we going to decrease? Are we increasing?

Clinton Wilkins
We’re going to hold steady. And if anything, we might see, continue to see some price growth. We can handle a 1, 2, 3% growth. We are a bit of an anomaly compared to the rest of Canada, and that’s okay. I think Halifax, Nova Scotia, Atlantic Canada, is a great place to live in, a great place to do business, but we do need more housing. I think the more housing that we can start, with all types, including rental, it’s going to help restabilizehe marketplace. And what they say is that the real estate market is just like every other market. It’s a game of supply and demand.

Dan Ahlstrand
Clinton is always a pleasure.

Clinton Wilkins
Thanks for having me.

Dan Ahlstrand
That is our mortgage guru. Clinton Wilkins, you can log on to his website, ClintonWilkins.ca, and there is all kinds of information about rates and what they mean, variables, fixed, and what’s better for you. And if you’re getting ready to redo your mortgage, or you’re looking, maybe to refinance, or looking to get some equity out of your house and out of your property. Lots of information is available there from Clinton. And of course, you can catch Clinton right here on this radio station every month on 95.7 News Radio with Mortgage 101, and the Merry Debtmas episode is up along with all of Clinton’s other episodes on our website, halifax.citynews.ca.