Canada’s biggest banks are offering different takes on where interest rates are headed, and RBC just made the boldest call yet.
📉 What’s the Latest on Interest Rates?
As talk of interest rate cuts continues, uncertainty is starting to build. While most major banks still believe more cuts are coming, RBC has changed its tune, and is now taking the most cautious approach among the Big Six.
🔒 RBC’s Forecast: Holding Firm at 2.75%
In its July Monthly Forecast Update, RBC said it no longer expects any additional rate cuts — not this year or next. The bank now sees the BoC’s overnight rate staying at 2.75% through 2026.
That’s a shift from earlier this year when RBC still expected one more cut. So, what changed?
đź’¬ RBC noted that trade-related risks have eased, but inflation remains unpredictable. Because of that uncertainty, the Bank of Canada has less urgency to lower rates further. Unless inflation improves significantly, rates may not move down again.
🔍 What Are the Other Banks Saying?
RBC may be taking the most conservative stance, but other major banks have a more flexible outlook:
🔹 Scotiabank
- Lowered its forecast slightly
- Now expects the policy rate to land at 2.25% (down from 2.50%)
🔹 BMO
- Has the most optimistic view for borrowers
- Predicts rates could drop to 2.00% by early 2026
🔹 TD, CIBC, and National Bank
- Still expect a final rate of 2.25%
- This aligns with the Bank of Canada’s current inflation outlook
Steve Huebl, “Mortgage Digest: RBC expects no further BoC rate cuts,” Canadian Mortgage Trends, July 9, 2025.
đź’ˇ What This Means for You
While rate cuts often bring welcome relief for homeowners and buyers, the latest forecasts point to a more stable environment, which could offer greater predictability and planning power.
RBC’s updated stance reflects a more cautious approach, based on inflation uncertainty. The other banks are still expecting some cuts, but no one is forecasting a dramatic drop anytime soon.
📊 If you’re buying, renewing, or refinancing, staying informed and planning ahead is key. Rates might not fall as far or as fast as expected.
📲 Not sure how this affects your mortgage plans? Reach out, we’ll help you make sense of it all and find the best strategy for your situation.