Bank of Canada Divided on Rate and Economic Outlook

Policy Rate Held at 2.25%

The Bank of Canada is maintaining its policy rate at 2.25% as the Canadian economy adjusts to recent shocks. However, Governing Council members expressed different views: some questioned whether the economic recovery would be sustainable, while others were concerned about rising inflation expectations.

No Immediate Change for Variable-Rate Borrowers

For mortgage borrowers, the rate hold means no immediate change to the interest rates on variable-rate mortgages and home equity lines of credit tied to lenders’ prime rates. It does not guarantee, however, that rates will remain unchanged in the months ahead.

Economic Conditions and Bond Yields Remain Important

The Bank will continue monitoring economic growth, employment, energy prices and inflation before making its next decision. Fixed mortgage rates may also move independently because they are influenced primarily by government bond yields rather than directly by the Bank’s policy rate.

Choose a Mortgage Based on Your Needs

Borrowers should avoid making mortgage decisions based solely on predictions of future rate changes. Choosing between a fixed and variable mortgage depends on your budget, plans and comfort with changing interest costs.

Review Your Mortgage Options

Set up an appointment with Maurice to review which mortgage option may be appropriate for your circumstances.

Source: Canadian Mortgage Trends, July 29, 2026