Bank of Canada Holds Rates at 2.25% — What It Means for Personal Loan Borrowers

Personal Loans February 14, 2026 2 min read

The Rate-Cutting Cycle Is Over (For Now)

Between mid-2024 and late 2025, the Bank of Canada slashed its overnight rate nine times — from a peak of 5% all the way down to 2.25%. On January 28, 2026, the Bank held steady for the first time in over a year.

For borrowers, this signals a period of rate stability. Variable-rate products won't get cheaper, but they also won't get more expensive — at least not yet.

What Does This Mean for Personal Loan Rates?

Personal loan rates in Canada currently range from 6.99% to 35%, depending on your credit profile and lender type:

  • Excellent credit (750+): 6.99% – 12% at major banks
  • Good credit (660–749): 10% – 18% at banks and credit unions
  • Fair or poor credit (below 660): 18% – 35% through alternative lenders

With the Bank of Canada holding steady, these ranges are unlikely to shift significantly in the near term. That's actually good news — it gives you time to compare options without worrying about rates climbing while you shop.

Why the Pause?

The biggest factor? Trade uncertainty with the United States. Free trade treaty negotiations are creating economic headwinds, and the Bank is taking a cautious "wait and see" approach. Most economists expect rates to hold through much of 2026, with a possible small hike (0.25%) toward year-end if trade tensions ease.

What Should Ontario Borrowers Do?

If you've been waiting for rates to drop further before borrowing, this pause is your signal to act. Here's why:

  1. Rates are already historically reasonable. At 2.25%, the overnight rate is well below the 5% peak of 2024. Personal loan rates have followed suit.

  2. Lenders are competing for your business. After a year of rate cuts, banks and online lenders are actively trying to attract borrowers. That means better terms and more flexibility.

  3. Waiting could cost you. If the Bank hikes later this year, personal loan rates will follow. Locking in now gives you certainty.

The Bottom Line

The Bank of Canada's rate pause isn't a red flag — it's a green light to stop waiting and start comparing. Whether you need $500 to bridge a gap or $50,000 for a major purchase, today's rates are favourable by recent standards.

Use our free comparison tool to see what you qualify for — it takes about 2 minutes and won't affect your credit score.

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