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Bank of Canada Holds Interest Rate at 2.25% — But Borrowers Are Now Stuck in Limbo

The Bank of Canada has once again pressed pause.
January 28, 2026 by
Bank of Canada Holds Interest Rate at 2.25% — But Borrowers Are Now Stuck in Limbo
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On Wednesday, the central bank held its benchmark overnight interest rate at 2.25%, a move economists widely expected — but one that quietly leaves Canadian borrowers facing more uncertainty, not less.

While the headline sounds calm, the message underneath is anything but.

“The Timing or Direction” Is Now Unclear

In his opening remarks, Governor Tiff Macklem acknowledged what many homeowners, investors, and mortgage professionals already feel:

The current policy rate is appropriate — but elevated uncertainty makes it difficult to predict the timing or direction of the next move.

That’s central-bank language for anything can happen next.

A rate cut? Possible.

A hike? Also on the table.

Stability? Only until something breaks.

Trade Risk, Politics, and a Fragile Outlook

In its latest Monetary Policy Report, the Bank said the economic outlook is “little changed” — but highly vulnerable.

Key risks include:

  • Unpredictable U.S. trade policy

  • Ongoing CUSMA uncertainty

  • Global geopolitical pressure

  • Slowing domestic growth later in the year

In other words: the economy looks fine… until it doesn’t.

Economists surveyed by Reuters were unanimous in expecting a hold this week, and nearly 75% believe rates may stay frozen through 2026. But even the Bank itself is now openly admitting it doesn’t know what comes next.

What This Means for Canadian Borrowers Right Now

This is where the problem starts.

When rates are high but frozen, banks become cautious:

  • Mortgage renewals slow down

  • Appraisals get tighter

  • Exceptions disappear

  • Files get delayed or declined

Borrowers renewing, refinancing, or needing equity access in 2026 are discovering that “wait and see” from the Bank often means “no” from the lender.

And when conditions change suddenly — they change fast.

Why More Borrowers Are Turning to Private Lending

In periods of rate uncertainty, private lenders step in where banks pull back.

At Lendworth, we’re already seeing:

  • Renewal refusals despite clean payment history

  • Investors stuck between falling values and rigid bank rules

  • Homeowners needing short-term flexibility while markets reset

Private mortgages aren’t about chasing rates — they’re about certainty, speed, and control.

Your Mortgage Strategy Can’t Be on Hold

The Bank of Canada may be unsure about the next move. Your finances shouldn’t be.

Whether you’re:

  • Facing a renewal

  • Rejected by your bank

  • Self-employed or asset-rich

  • Looking to consolidate debt or access equity

Timing matters more than rates right now.

👉 Talk to Lendworth before the market forces your hand.

Fast approvals. Clear exits. Real solutions.

🔗 Apply or speak with a specialist: https://www.lendworth.ca

Your equity deserves more.