This week, the Bank of Canada made its much-anticipated rate announcement—and the short version? Nothing changed.

In a video conversation with Jay Lewis (Edmonton real estate agent extraordinaire), I broke down what this decision means for Albertans navigating home ownership in today’s market. As I explained in our discussion, “A lot of us were hoping that we’d see the Bank of Canada cut its rate, but nothing happened. No drop, no increase. It’s just the same—and it hasn’t changed since March earlier this year.”

Why Did the Bank Hold Steady?

While a stable rate might sound like good news to first-time home buyers in Edmonton, the decision to keep things neutral is tied closely to one ongoing challenge: inflation.

“The Bank of Canada’s primary goal is to keep inflation low and predictable,” I said. “They want to see it between 2 and 3%. But since March, when they stopped lowering rates, inflation has gone from around 1.5% to a bit over 2.5%.” That means inflation is rising again—and that’s why the Bank isn’t ready to cut rates further.

Jay asked, “So what’s causing the spike in inflation?” Let’s get into it.

I explained that while there are global factors at play, we’re also seeing inflationary pressure from within Canada. “Government spending is up 4% this year—not even counting interest on the debt—and the federal deficit has ballooned 70% compared to last year. That means the government needs to raise more money, and they’re offering higher returns on bonds to do that.”

That drives up bond yields, which pushes fixed mortgage rates higher. On top of that, we’re still waiting to see if new tariffs will be introduced in August. “Tariffs, like the carbon tax, are inflationary in nature. They make things more expensive. Even the threat of tariffs has already pushed fixed rates up.”

What Should Buyers Do Now?

For many first-time buyers, especially here in Edmonton where affordability is still relatively strong compared to other Canadian cities, this uncertainty raises a big question: should you buy now, and if so, should you go fixed or variable?

The market is currently forecasting that variable rates may come down slightly over the next year—but in the longer term, we could see them go up again. “It actually looks like rates will be higher than they are today four years from now,” I said.

Fixed rates, on the other hand, are expected to trend upward gradually. “If you can get a fixed interest rate today that’s lower than the variable, you might just like that stability—lock in close to 4% and have that for the next five years.” I also warned buyers to be cautious of three-year terms, which could renew into a higher-rate environment.

Ultimately, Jay wrapped it up with an important reminder: “Everybody’s situation is different. I would highly recommend and suggest that you reach out to Josh and his team, get your own personalized mortgage consult, and see what is the best option for you.”

It’s Time to Act

If you’re buying your first home in Edmonton, now is the time to talk through your options—not guess your way through them. The market is uncertain, and while rates haven’t changed this month, the landscape is still shifting. Whether you want the stability of a fixed term or the potential savings of a variable, make sure your mortgage fits your budget, goals, and risk tolerance.

Have questions? Reach out for a free consultation—we’re happy to help you make sense of it all.