07:17 AM EDT, 05/09/2025 (MT Newswires) -- Many Canadian mortgage holders and would-be buyers have been watching the "dramatic" moves in rates over the last few years with some concern, said Bank of Montreal (BMO).

Since rates are -- and will likely remain -- higher than their record lows during the pandemic, the upside pressure from mortgage renewals on household budgets have been a concern for the Bank of Canada, noted BMO.

In this year's Financial Stability Report, the BoC highlighted that the pressure will remain through 2026-but crucially, it could be lower than anticipated last year thanks to downward adjustments to expected interest rates, stated the bank.

At this point, the improvement has mostly run its course, as BMO's forecast has just three more BoC rate cuts penciled in for this year.

Rates could go even lower -- but that will likely only happen if there is a more meaningful hit to the outlook and, as such,

the labor market -- from the trade war, added the bank.