By Josh Tagg, mortgage broker · Mortgages for Less with INDI Mortgage · Calgary, serving all of Alberta ·
If you’re thinking about buying a home, refinancing, or just keeping an eye on your mortgage, the latest news on the Bank of Canada matters. Here’s an update on what’s happening with interest rates, the economy, and what it could mean for you in Alberta.
Is the Bank of Canada holding rates for now?
The Bank of Canada is expected to keep its policy rate at 2.25% at its next meeting on December 10. While the easing cycle—when rates are cut—is technically “paused,” economists are split on what comes next. Some see further cuts in 2026, while others forecast hikes.
Why did the Bank cut rates in October?
In late October, the Bank cut the policy rate to 2.25%, citing weak domestic demand, labour market softness, and tepid growth expected in the second half of 2025. Officials had considered delaying the cut until after the federal budget and more clarity on U.S. trade policy, but ultimately decided that a small cut was warranted. The rate is now considered “on the stimulative side” of neutral, meaning it encourages borrowing without overheating the economy.
The central bank also noted that monetary policy was “likely close to the limits of what it could do” to support growth under current circumstances. Trade-affected sectors like auto, steel, aluminum, and lumber have been hit hard, and the spillover to the broader economy reinforced the case for the cut.
What do the big banks expect the Bank of Canada to do next?
Most banks—including TD, RBC, and CIBC—expect the Bank of Canada to hold rates steady at 2.25% through 2026. BMO and National Bank leave the door open for one more small cut if growth and inflation weaken early next year.
Scotiabank takes a different view. Their economists believe the rate-cut cycle is over and that Governor Tiff Macklem could raise rates by two quarter-point moves in the second half of 2026. Scotiabank argues that the recent cuts were more about “insurance” than stimulus, and ongoing inflation pressures are strong enough to justify future hikes once the economy stabilizes.
| Forecaster | Expected path for 2026 |
|---|---|
| TD, RBC, CIBC | Hold at 2.25% through 2026 |
| BMO, National Bank | Hold, with room for one more small cut if growth and inflation weaken early in the year |
| Scotiabank | Cutting cycle over; two quarter-point hikes in the second half of 2026 |
Which economic trends are shaping Bank of Canada decisions?
Canada’s economy grew more than expected in the third part of 2025, mostly because we sold more to other countries, not because people were buying more at home. In October, the economy actually got a little smaller, and in Alberta things like the teachers’ strike made it harder for businesses. Prices aren’t rising as fast as before, but some costs have stuck around because people are still spending money and many families have savings. Jobs are a mixed picture too: Canada had 66,600 more jobs in October, but there are fewer full-time jobs and more part-time ones. Because of all this, the Bank of Canada is being careful about changing interest rates.
How could new immigration targets affect the Bank’s plans?
The federal government’s new immigration targets could significantly impact the Bank’s outlook. By reducing temporary residents to under 5% of the population by 2027, population growth could slow sharply, possibly reaching near-zero in 2026 and 2027.
This slower population growth changes the mechanics of the labour market. The unemployment rate could fall even without net job creation, tightening the labour market faster than expected. For the Bank of Canada, this is a risk: lower interest rates in such a scenario could re-ignite inflation pressures.
Lower immigration could also dampen housing demand, particularly in the purpose-built rental sector, since fewer newcomers reduce the need for new housing supply. That said, continued government support for home building may offset some of this downside risk.
What does this mean for Alberta homebuyers?
For Alberta homebuyers, the takeaway is:
Rates are likely to stay stable in the short term. If you’re locking in a mortgage, your rate shouldn’t change much immediately.
Future moves are uncertain. Some economists expect cuts in 2026, while others, like Scotiabank, anticipate hikes. Keeping an eye on inflation, employment, population growth, and domestic spending will help you time purchases or refinancing.
Immigration and housing demand matter. Slower population growth could moderate demand for new homes and rental properties, which may influence construction activity and housing prices in Alberta.
Which updates should you keep an eye on?
The Bank of Canada releases minutes from each policy meeting two weeks afterward, offering insight into the next moves. Economic indicators like GDP, employment numbers, inflation reports, and population growth will continue to shape monetary policy throughout 2026. Contact me to discuss how these change impact your personal journey to homeownerhsip.
How an Alberta mortgage broker helps when the rate outlook is split
When forecasters disagree on whether the next move is a cut or a hike, the plan matters more than the prediction:
- We compare fixed and variable options side by side on the rates available today.
- We check that your payment still works if rates rise instead of fall.
- We arrange a rate hold on a pre-approval so a purchase isn’t exposed while you shop.
- We look at renewals and refinances ahead of the maturity date instead of at the last minute.
- We work with buyers and homeowners across Calgary, Edmonton and all of Alberta.
Buying, renewing or refinancing while the forecasts disagree?
Let’s look at the options available to you today and build a plan that works whichever way rates move.
Apply Online → Book a Discovery Call → Serving Calgary, Edmonton & all of Alberta · Mortgages for Less with INDI MortgageBank of Canada rate outlook, December 2025: common questions
What was the Bank of Canada expected to do in December 2025?
Why did the Bank of Canada cut rates in October 2025?
What did the big banks forecast for interest rates in 2026?
Why did Scotiabank expect rate hikes?
How do immigration targets affect interest rates?
Could lower immigration affect housing demand in Alberta?
When does the Bank of Canada publish the minutes of its rate meetings?
This article is general information for Alberta homebuyers and homeowners, not financial, mortgage, tax or legal advice. It reflects Bank of Canada commentary, bank forecasts and economic conditions as of December 3, 2025; rates and forecasts have changed since, and future rate decisions cannot be predicted with certainty. Any mortgage is subject to lender approval. Please speak with a licensed mortgage professional about your specific situation. Mortgages for Less with INDI Mortgage.
