Bank of Canada Holds Rate at 2.25% — March 18, 2026

Jeff Johnson • March 18, 2026

The Bank of Canada announced today that it is holding its target for the overnight rate at 2.25%, with the Bank Rate at 2.5% and the deposit rate at 2.20%. For anyone watching the mortgage market — whether you're renewing, purchasing, or simply keeping an eye on borrowing costs — here's a breakdown of what was announced and what it may mean for you.

What the Bank of Canada Said

The Global Picture

The Bank noted that global economic growth was tracking at approximately 3% heading into 2026, but conditions have become more uncertain following the outbreak of conflict in the Middle East. Global oil and natural gas prices have risen sharply as a result, which is expected to push inflation higher in the near term. Transportation bottlenecks — including disruptions tied to the Strait of Hormuz — are also raising concerns about the supply of key commodities.

Financial markets have responded: global bond yields have risen, equity prices have declined, and credit spreads have widened. The Canada-U.S. dollar exchange rate has remained relatively stable through all of this.

The Canadian Economy

Canada's GDP contracted 0.6% in the fourth quarter of 2025, somewhat weaker than the Bank had anticipated — though much of this was driven by a larger-than-expected drawdown in inventories, rather than a collapse in consumer spending. In fact, domestic demand grew by more than 2%, supported by consumer and government spending.

Looking ahead, the Bank expects modest economic growth as Canada continues adjusting to U.S. tariffs and ongoing trade policy uncertainty. However, the labour market has softened. Employment gains made in the fourth quarter of 2025 were largely reversed in the first two months of 2026, and the unemployment rate climbed to 6.7% in February.

Inflation

On the inflation front, CPI inflation eased to 1.8% in February, down from 2.3% in January — below the Bank's 2% target. Core inflation measures have also come down and are sitting close to 2%. That said, the recent surge in global energy prices is expected to push gasoline prices — and therefore total inflation — higher in the coming months.

Why the Bank Held

With growth risks tilted to the downside and inflation risks moving upward due to energy prices, the Bank of Canada's Governing Council chose to hold steady at 2.25% rather than move in either direction. The Bank cited the need to assess the evolving impact of U.S. tariffs, trade uncertainty, and the Middle East conflict before making any further adjustments.

In the Bank's own words, they "stand ready to respond as needed" — signalling that future moves remain on the table depending on how conditions develop.

What This Means for Mortgage Holders and Buyers

A rate hold means no immediate change to variable-rate mortgage payments or home equity lines of credit (HELOCs) tied to the prime rate. However, the language from the Bank signals a cautious, wait-and-see approach in a climate that carries real uncertainty — both on the growth and inflation sides.

The next scheduled rate announcement is April 29, 2026 , at which point a new Monetary Policy Report will also be released with updated economic projections.

As always, every borrower's situation is unique. If you have questions about how today's announcement affects your mortgage — or want to explore your options — don't hesitate to reach out. Staying informed is one of the best tools you have in any rate environment.

Information sourced from the Bank of Canada's official press release dated March 18, 2026.

Jeff Johnson

Mortgage Expert

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What Mortgage Lenders Need to Know About Your Down Payment Source

By Jeff Johnson • July 29, 2026
Why the Source of Your Down Payment Matters More Than You Think When buying a home, most people focus on how much they need for a down payment. What often gets overlooked is that where the down payment comes from matters just as much to the lender . The source of your down payment affects approval, risk assessment, and how your mortgage is structured. Here’s why lenders care—and what you need to know. 1. Anti–Money Laundering Requirements Lenders aren’t just being cautious—they’re legally required to verify the source of your down payment. To comply with anti–money laundering regulations, lenders must document where every dollar of the down payment came from on every purchase. Acceptable Down Payment Sources Down payments can come from: Your own savings or investments Borrowed funds through an insured program (such as FlexDown) A gift from an immediate family member How You Prove the Source Personal savings: You’ll need bank statements showing the funds have been in your account for at least 90 days , or proof they were accumulated through payroll deposits or other acceptable sources. Borrowed funds: Any borrowed portion must be included in your debt service ratios , since you’re responsible for repayment. Gifted funds: A signed gift letter is required confirming the money is a true gift with no repayment obligation , along with proof the funds were deposited into your account. 2. Financial Suitability and Risk The source of your down payment also tells the lender a lot about your financial habits. Down payments coming from your own savings demonstrate: Positive cash flow The ability to save consistently Strong financial management This reassures lenders that you’re more likely to keep up with mortgage payments. If the down payment is borrowed or gifted, lenders may look more closely at the rest of your application to ensure the mortgage remains affordable. Why a Larger Down Payment Helps From a lender’s perspective, more equity equals lower risk. The more money you have invested in the property, the less likely you are to walk away from the mortgage. This reduces the lender’s exposure and can sometimes result in better terms. 3. Down Payment and Loan-to-Value (LTV) Your down payment directly establishes your loan-to-value ratio (LTV)—the percentage of the property’s value being financed. In Canada: Lenders can finance up to 95% of a property’s value The buyer must contribute at least 5% as a down payment Example: On a $400,000 purchase: Maximum mortgage = $380,000 Minimum down payment = $20,000 How the Source Affects LTV Property value must be genuine and independently supported. Lenders rely on appraisals and comparable sales—not artificial price inflation. If: The seller provides money back The buyer doesn’t bring the full down payment independently Funds move “behind the scenes” …the lender considers this a change to the LTV and may decline the mortgage. All financial details of the purchase must be fully disclosed. Non-disclosure is mortgage fraud , and lenders will not proceed if the numbers don’t align. Final Thoughts Lenders ask for detailed documentation about your down payment source for good reason—it affects legality, risk, and the structure of your mortgage. Understanding these rules upfront helps avoid delays, declined applications, and last-minute surprises. If you’d like to review your down payment options or talk through mortgage financing, feel free to connect anytime. I’d be happy to walk you through the process and help you plan with confidence.

How to Finance a Spousal Buyout After Separation or Divorce

By Jeff Johnson • July 22, 2026
Mortgage Options During Divorce or Separation: What You Should Know If you’re going through—or considering—a divorce or separation, you may not realize that there are mortgage solutions specifically designed to help one party keep the home . For many people, the family home is their largest asset and where most of their equity is tied up. In situations like this, a spousal buyout program can allow one person to refinance the property and buy out the other party’s share—often up to 95% of the home’s value . This option can work whether you want to keep the home or your former partner does. What Is the Spousal Buyout Program? The spousal buyout program is a refinancing option that allows one owner to purchase the other owner’s share of the property as part of a separation or divorce settlement. In some cases, it can also be used to pay off jointly held debts, as outlined in a legal agreement. Below are some of the most common questions about how the program works. Is a finalized separation agreement required? Yes. Lenders require a signed and finalized separation agreement that clearly outlines how assets and debts are to be divided. This document is essential for approval. Can the funds be used for renovations or personal debts? No. Funds from a spousal buyout can only be used to: Buy out the other owner’s share of equity Pay off joint debts specifically listed in the separation agreement They cannot be used for renovations, personal loans, or unrelated expenses. How much equity can be accessed? The maximum amount available is the amount required to: Buy out the other party’s agreed-upon share of equity Pay off any joint debts listed in the agreement This amount cannot exceed 95% loan-to-value . What is the maximum loan-to-value allowed? The maximum loan-to-value is the lesser of : 95%, or The remaining mortgage balance plus the required buyout and joint debt payout The property must be the primary owner-occupied residence . Do all parties need to be on title? Yes. All individuals involved in the buyout must currently be registered on title. Your solicitor will confirm this through a title search. Does this only apply to married or common-law couples? No. While commonly used for married or common-law couples, the program may also apply to siblings or friends who jointly own a property and need one party to exit the mortgage. These cases are typically reviewed on an exception basis and require insurer approval. If no separation agreement exists, the purchase contract must clearly outline the buyout terms. Is a full appraisal required? Yes. A physical, on-site appraisal is required to confirm the property’s value before the mortgage can be finalized. Final Thoughts This overview covers some of the most common questions about mortgage options during separation or divorce, but every situation is different. Working with an independent mortgage professional gives you access to multiple lenders, specialized programs, and unbiased advice—so you can clearly understand your options and choose what’s best for your future. If you’re navigating a separation and need guidance around keeping or selling the home, feel free to connect anytime. All conversations are handled with discretion and confidentiality, and I’d be happy to walk you through your options.