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As widely anticipated, the Bank of Canada held its Overnight Rate at 2.25%, with the Lender Prime Rate remaining steady at 4.45%. However, the broader interest-rate environment may be shifting.

Stronger than anticipated economic data pushed government bond yields sharply higher last week.  In fact, bond yields jumped almost 30 bps (+0.30%) from December 1st to 5th.  As fixed mortgage rates are closely tied to bond yields, this jump has created upward pressure on fixed mortgage pricing, despite the rate hold.

For anyone active in the housing market, this dynamic matters. With yields moving quickly and some lenders already adjusting rates, it may be a good moment to refresh or lock in a mortgage pre-approval while favourable options remain available. Given today’s strong inventory levels and wider selection of homes, securing a rate could help protect against further increases and preserve interest savings.

In short, the Bank of Canada is on pause, but the bond market isn’t, and that shift may impact borrowing costs sooner than expected.