Bank of Canada Holds at 2.25% — What July's Decision Means for Your Mortgage
The Bank of Canada announced this morning that it is holding its overnight policy rate at 2.25% — the sixth consecutive hold since the last cut in October 2025. Here's what that actually changes for Canadian mortgage holders and shoppers — and what it doesn't.
If you have a variable-rate mortgage
Nothing changes today. Prime stays at 4.45%, where it has sat since late October 2025, so your rate and payment are exactly what they were yesterday. For context: each 0.25% move in prime shifts the payment on a typical 25-year variable mortgage by roughly $13–14 per month per $100,000 borrowed — a number worth keeping in your back pocket, because markets are split on whether the next move is a cut or, if oil-driven inflation persists, something less friendly.
If your renewal is coming up
If you locked in a fixed rate in 2021 at rock-bottom levels, renewal in 2026 still means a step up — but far less of one than borrowers faced in 2023–24. The 5-year Government of Canada bond yield, which drives fixed pricing, is sitting around 3.15%, up from its spring 2025 lows. If you're renewing off a 2022–23 rate, you may actually renew flat or lower. Either way, don't accept your lender's first offer: pull your renewal letter, then compare against current market rates using the mortgage calculator.
If you're house-hunting
The stress test still qualifies you at your contract rate + 2% (or the 5.25% floor, whichever is higher). With today's hold, the affordability math is unchanged from last month: a contract rate near 4% means qualifying near 6%. If you were pre-approved earlier this summer, your numbers still stand — check what you qualify for with the affordability tool.
What the Bank said
CPI inflation rose to 3.2% in May, but the Bank was quick to point out that's mostly gasoline — excluding it, inflation was 2.2%, and core measures remain close to 2%. The statement projects inflation returning to around 2% in early 2027 and the economy growing 1.8% in both 2027 and 2028, with Q2 growth already estimated at 2.5%. Governing Council judged the current rate "appropriate to sustain the economic recovery," while flagging risks from the Middle East conflict and US trade policy — and Governor Macklem was blunt in the press conference: "We will not let higher oil prices become persistent inflation."
The next decision
The next rate announcement is September 2, 2026. Model your own payment scenarios anytime with the mortgage calculator or check what you qualify for with the affordability tool.
Source: Bank of Canada press release, July 15, 2026. Educational only — not financial advice.