Bank of Canada Policy Rate Update
On September 2, 2026, the Bank of Canada held its policy rate at 2.25% for the seventh consecutive meeting. Prime Rate at most major lenders remains 4.45%, so if you have a variable-rate mortgage or a HELOC, your payment is unchanged.
Why fixed rates are still rising
Fixed-rate mortgages do not follow the Bank of Canada's policy rate. They follow five-year Government of Canada bond yields, which reflect what it costs lenders to fund five-year loans.
Those bond yields have been climbing since mid-August and rose above 3.4% on September 2, up from 3.14% at the July decision and the highest level in about two years. Lenders have already raised fixed rates more than once since mid-August, and today's hold did not reverse that trend.
Variable vs. fixed mortgages
Variable-rate mortgages and HELOCs: No change to your rate or payment. Prime Rate stays at 4.45% at most major lenders.
Fixed-rate mortgages: Not directly affected by today's policy-rate announcement, but the bond yields behind them are up. If you are shopping for a fixed rate or renewing into one, you are in a different market than you were in July.
What to watch next
The Bank's tone is more cautious than it was in July. It is not promising an increase, but the phrase that the current rate "remains appropriate" has been removed. Governor Tiff Macklem said that if inflation stays too high, the Bank is prepared to raise rates, and if that takes more than one increase, it is prepared to do that.
Bond traders are now pricing in a possible increase before year-end, while most bank economists are not. The direction is less certain than it was.
Rate-hold strategy if you are buying or renewing soon
If you are buying or renewing within the next 90 to 120 days, ask your lender about a rate hold. Subject to their terms and full approval, most lenders will lock in a quoted rate for 90 to 120 days, and many will give you the lower rate if their available rate falls before your closing date.
If you took your mortgage in 2020 or 2021 and are renewing in the next year or two, it is worth looking at what your new payment could be now, while you still have time to weigh fixed against variable and explore your options.
What to watch before the next announcement
The Bank will publish its next forecast on October 28, 2026, alongside the rate decision. The inflation outlook in that forecast will determine whether the Bank holds, raises, or cuts. Inflation, energy prices, trade developments, and employment numbers will all shape that outlook and can also move bond yields, which can move fixed rates even when the policy rate does not change.
Next update: October 28, 2026