The Bank of Canada held its policy rate at 2.25% this morning, and if you've been sitting on the fence about buying a home, this might be your cue to jump off.

It's the second consecutive hold, which tells you something important. After slashing rates by a full percentage point in late 2025, the central bank isn't rushing to cut more. But they're also not hiking. They're sitting tight, watching, waiting.

And that stability? That's actually the story.

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When 2.25% Feels Like a Steal

Remember July 2023? Rates hit 5% and first-time buyers basically vanished from the market. Monthly mortgage payments on a $500,000 home jumped by hundreds of dollars compared to just a year earlier. People who could have comfortably afforded a mortgage suddenly couldn't pass the stress test.

Fast forward to today. That same buyer who got priced out at 5% can now qualify for significantly more house at 2.25%. We're talking a difference that could mean an extra bedroom, a bigger yard, or a better neighborhood.

The math is simple but the impact is huge. A mortgage that felt impossible 18 months ago is suddenly manageable again.

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The Real Opportunity Nobody's Talking About

Here's what makes this moment different from the last time rates were low.

Back in 2020 and 2021, when rates dropped during the pandemic, the housing market went absolutely insane. Bidding wars, waived conditions, offers $100,000 over asking. Low rates created a feeding frenzy because inventory was brutally tight and everyone was panic-buying.

Now? Low rates, but the market's actually functional. You can negotiate. You can do proper inspections. You can take a week to think about an offer without losing the house to someone who'll pay cash sight unseen.

That combination doesn't come around often. Low borrowing costs plus time to make smart decisions.

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The First-Time Buyer Trap

There's a weird thing happening with first-time buyers right now. The average age has crept into the mid-30s, which creates a problem.

When you're 25 and buying your first place, a 500-square-foot condo works fine. You're single or maybe coupled up, no kids, willing to sacrifice space for ownership. That's the classic starter home trajectory.

But a 35-year-old first-time buyer? They've often got a partner, maybe a kid or two on the way. They can't buy the tiny condo and trade up in three years. They need the family home right out of the gate.

Which means first-time buyers today are competing for the same properties as second and third-time buyers. They need three bedrooms, proximity to schools, maybe a yard. And those homes cost more.

The lower rate environment helps close that gap. It expands buying power enough that people entering the market late can actually afford something that fits their life instead of settling for something too small and hoping to trade up before the kids arrive.

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Fixed vs Variable Just Got More Interesting

With rates holding at 2.25%, the fixed versus variable mortgage debate shifts.

Fixed locks you in. You know your payment for the next one to five years, no surprises. If rates climb, you're protected. If they drop further, you're stuck paying more than you need to.

Variable rides the waves. When the Bank of Canada cuts, your payment drops. When they hike, your payment climbs. Right now you're stable, but you're gambling on what happens next.

The gamble matters more than usual because most economists expect rates to stay put through all of 2026. CIBC, TD, pretty much everyone is calling for no moves up or down this year.

If they're right, variable borrowers just locked in roughly 12 months of predictable payments at a rate that's still historically attractive. Not bad.

If they're wrong and something forces the Bank of Canada's hand, well, that's the risk you're taking. Economic shocks happen. Trade wars escalate. Nobody actually knows the future.

The stress test adds another layer. You need to qualify at either your rate plus 2% or 5.25%, whichever is higher. So even if you're getting a mortgage at 2.25%, the bank is testing whether you can handle payments at 4.25% or 5.25%. That matters when you're figuring out how much house you can actually afford.

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What About Real Estate Investors?

If you're not buying to live in it, the rate hold creates different opportunities.

Real Estate Investment Trusts are getting interesting again. REITs own apartment buildings, office towers, shopping centers, industrial warehouses. They generate rental income and pass most of it to shareholders.

Lower interest rates help REITs in two ways. They can finance new properties cheaper, and they can refinance existing debt at better rates. Both improve profitability, which theoretically boosts returns for investors.

Office REITs are particularly fascinating right now. They got crushed during the pandemic when everyone went remote. Vacancy rates spiked, valuations tanked, investors fled.

But things are shifting. Return-to-office mandates are becoming more common. Companies are rethinking their space needs. Vacancy rates are still elevated compared to pre-pandemic, but they're stabilizing in some markets.

If you believe offices are coming back, even modestly, buying into office REITs while sentiment is still cautious could pay off. You're essentially betting on a recovery that most people aren't fully pricing in yet.

Residential REITs are steadier. Rental vacancy rates remain tight across most Canadian cities. Apartment REITs keep generating rental income regardless of economic turbulence. Lower financing costs just make the business more profitable.

The broader point is diversification. Real estate exposure doesn't have to mean buying a house or a rental property. REITs let you play the market without dealing with tenants, maintenance, or property management.

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Why the Bank of Canada Is Being So Careful

Governor Tiff Macklem's comments this morning weren't throwaway corporate speak. The Bank of Canada is genuinely navigating some serious uncertainty right now.

The upcoming review of the Canada-U.S.-Mexico Agreement is hanging over everything. Trade tensions with the United States could escalate. New tariffs could hit. Supply chains could get disrupted. All of that affects inflation, employment, and ultimately housing.

In today's announcement, Macklem said the governing council sees the current policy rate as "appropriate" but admitted that "elevated uncertainty makes it difficult to predict the timing or direction of the next change."

Translation: we're holding steady because we don't know what's coming next, and we want flexibility to respond in either direction.

If trade relations stabilize and the economy strengthens, they might hold or even consider hiking to keep inflation in check. If trade disputes get worse and growth slows, they've got room to cut further.

The Bank of Canada cut rates by a full percentage point in the second half of 2025 with quarter-point reductions in October and December. They're not in a rush to do more, but they're also not closing the door.

That cautious stance actually helps homebuyers and investors make decisions. Stability beats volatility. Knowing rates are likely to hold through 2026 lets you plan without constantly second-guessing whether you should have waited another month.

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The Okanagan Angle

National rate policy hits different in regional markets.

The Okanagan has its own dynamics. Tight inventory, elevated prices compared to many Canadian markets outside the major metros, strong rental demand driven by tourism and a growing population.

Lower interest rates help Kelowna and Vernon and Penticton buyers qualify for mortgages on homes that were out of reach at 5%. That matters when you're looking at markets where single-family homes in decent neighborhoods still command premium prices.

But rate cuts don't create inventory. The Okanagan's housing supply constraints run deeper than interest rates. You can afford more house, but you still need houses to choose from.

For investors, the region's rental dynamics make it attractive regardless of rate environment. But lower financing costs improve the cash flow math on rental properties. That $500,000 property that barely broke even at 5% rates might actually generate positive monthly cash flow at 2.25%.

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Should You Actually Do Anything?

If you're financially ready, meaning you've got stable income, a down payment saved, and can handle mortgage payments comfortably, this rate environment is about as good as it's going to get in the near term.

The people saying "rates might drop more, wait" are gambling. Sure, rates could drop. They could also hold for a year or more. And while you wait, you're paying rent that's probably not far off what your mortgage payment would be.

The people saying "prices might come down more, wait" are also gambling. Home prices in some markets have softened from their peaks, but we're not seeing crashes. And with rates this low, demand could pick back up and push prices higher.

Waiting for perfect conditions is how people end up waiting forever. Markets don't ring a bell at the bottom.

If you're not ready, if savings are still thin or job security is uncertain, then rate holds don't change that fundamental math. Don't force a purchase just because borrowing is cheaper. That's how you end up house poor.

But if you're ready? If you've been waiting for rates to stabilize and for the market to calm down from pandemic insanity? This might be it.

The Bank of Canada just told you they're planning to sit still through 2026. That's your window. What you do with it is up to you.

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If you're trying to figure out what rates at 2.25% actually mean for your buying power in the Okanagan or you want to run numbers on properties you're considering, the team at Coldwell Banker Horizon Realty can walk through the math with you and help you understand whether this is your moment.