Bank of Canada Holds Rate at 2.25% — What It Means for Mortgage Borrowers

The Bank of Canada held its policy rate at 2.25% on September 2, 2026. Governor Tiff Macklem said growth and inflation were broadly tracking the Bank’s forecast, but uncertainty remains around tariffs, energy prices and the strength of the recovery.

1. The Bank Held Because Growth and Inflation Are Still Close to Forecast

Consumer spending, housing activity and business investment have improved.

At the same time, the recovery remains uneven, and the Bank is not yet seeing enough reason to move rates again.

2. Tariffs May Have Limited Direct Impact — but Uncertainty Matters More

New U.S. tariffs affect products representing about 5% of Canadian exports to the United States.

The larger concern is business confidence. If uncertainty continues, companies may delay investment, expansion and hiring.

3. Inflation Is Near 2% Underneath the Gasoline Effect

Headline inflation was around 3% in July, but about 2.2% when gasoline was excluded.

Underlying inflation measures remained close to 2%, although prolonged higher oil prices could create broader inflation pressure later.

4. Another Rate Cut Is Possible — but Far From Guaranteed

The next Bank of Canada decision is October 28, 2026, together with an updated Monetary Policy Report.

The Bank will be watching whether growth continues, inflation remains contained and tariff uncertainty begins to affect the broader economy.

For mortgage borrowers, this means it may be risky to make a renewal decision based only on the expectation of another rate cut.

My Take for Mortgage Borrowers

If your mortgage is renewing soon, compare fixed and variable options based on several rate scenarios—not just today’s advertised rate.

Also consider penalties, prepayment privileges, portability and flexibility, because these can materially affect your total borrowing cost.

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