Rates Hold at 2.25%, but Fixed Mortgages Are Climbing — What to Do Before October 28

This month’s short list:

• The Bank of Canada held its policy rate at 2.25% on September 2, 2026, for a seventh consecutive decision.
• The next decision is October 28 at 9:45 a.m. ET, alongside the quarterly Monetary Policy Report.
• Variable mortgage rates and lender prime rates have not moved, while fixed mortgage pricing has risen with bond yields.
• Borrowers renewing in 2026 may face higher payments, especially those moving from pandemic-era five-year fixed rates.

What changed

The policy rate stayed unchanged

The Bank of Canada maintained its policy rate at 2.25% on September 2. The Bank said inflation and the economy were evolving broadly as forecast in July, while noting increased upside risks to inflation and greater uncertainty for growth because of new US tariffs. It gave no forward guidance beyond saying it is prepared to adjust monetary policy as needed.

The next announcement is October 28, 2026, at 9:45 a.m. ET. It will include the Bank’s quarterly Monetary Policy Report, which sets out its base-case projection for inflation and economic growth. The final scheduled decision of the year is December 9.

Fixed and variable mortgages are responding differently

The policy rate itself has not changed, and lender prime rates have remained at 4.45%. Variable mortgage rates therefore have not moved in response to the September decision. Fixed mortgage rates are influenced more directly by Government of Canada bond yields, which have risen. The five-year Government of Canada yield reached a 52-week high near 3.73% on September 28, and major banks have raised some fixed rates.

Why it matters

If you renew, buy, or refinance soon

The timing of the Bank’s next decision may matter, but fixed-rate pricing has already moved before that announcement. A rate hold is not a guarantee that fixed rates will remain unchanged, and a policy-rate change would not automatically produce the same movement in every mortgage product.

If you have variable debt or a line of credit

Money markets were pricing in roughly 100 basis points of Bank of Canada increases over the following 12 months, with about one-in-four odds of a quarter-point hike on October 28. Most bank economists still expected the first increase in 2027. Market pricing is a signal of expectations, not a forecast or a commitment by the Bank.

The Bank has also said monetary policy cannot offset tariffs or influence global energy prices. Its role is to keep global developments from undermining price stability. Inflation was 3% in August, influenced by gasoline prices, while core measures remained near target; the Bank still expected inflation to return to 2% by early 2027.

Your next check

Check your mortgage timeline

If your mortgage renews, closes, or may be refinanced in the next few months, record the renewal date, current rate, balance, remaining amortization, and prepayment or transfer restrictions. Ask your lender or broker whether a rate hold is available and what conditions apply.

Compare the offer, not just the headline rate

As of mid-October, Ratehub reported a lowest widely available high-ratio five-year fixed rate of 4.34%. That figure is a market example, not a guaranteed offer. Rates vary with province, borrower qualification, mortgage insurance, loan-to-value ratio, term, and lender. Insured mortgages generally price lower than uninsured mortgages because the lender has default insurance protection.

Watch the two October dates

The October 19 inflation report is the next major data release identified as relevant before the October 28 decision. On October 28, check the policy announcement and Monetary Policy Report rather than relying only on a headline or a rate prediction.

If you have variable-rate debt, confirm how your lender applies a prime-rate change: whether the payment changes immediately, whether the amortization changes, and how your contract treats a payment-trigger point.

Small print

This issue covers monetary policy and mortgage rates only; it does not identify federal tax or benefit changes. Expectations cited here come from market pricing, bank economists, and reporting published by the sources below. They are not guarantees. Mortgage examples are not personalized calculations. Confirm your contract and options with your lender, broker, or a qualified professional. This newsletter is general education, not individualized financial, mortgage, or tax advice.

Sources

• Bank of Canada, September 2 policy-rate announcement: official confirmation of the 2.25% hold, inflation and tariff-risk framing, and the next decision date. Official press release
• Bank of Canada, October 28 event page: official time and confirmation that the decision will accompany the Monetary Policy Report. Scheduled announcement
• nesto, Bank of Canada interest-rate schedule: policy-rate history, prime-rate context, announcement dates, and market-expectation reporting. Rate schedule
• nesto, mortgage-rate forecast updated October 9, 2026: bond yields, fixed-rate movements, renewal estimates, and economist expectations. Mortgage forecast
• Ratehub.ca, best mortgage rates: October 14 market-rate examples and insured-versus-uninsured context. Rate comparison
• RBC My Money Matters: general explanation of how policy-rate changes can affect variable and fixed mortgage pricing. Rate explainer

Member renewal worksheet

Use this worksheet to prepare a like-for-like renewal comparison. It is an organizing tool, not a recommendation.

• Contract facts: renewal date; current balance; current interest rate; remaining amortization; payment frequency; insured or uninsured status; prepayment privileges; discharge, transfer, or break fees.
• Scenario A — stay variable: current rate; lender’s prime-rate spread; current payment; payment-change rules; trigger or cap language; balance after one year if nothing changes.
• Scenario B — choose fixed: offered rate; term; payment; total interest over the term; penalty formula; portability; permitted annual prepayments.
• Scenario C — compare another lender: rate; lender fees; appraisal or transfer costs; legal costs; broker or discharge costs; deadline for accepting the offer.
• Stress check: write down the monthly payment you could manage if the rate rose by 0.25, 0.50, or 1.00 percentage point. Compare those amounts with each lender’s actual payment calculation.
• Questions to send in writing: Is the rate hold guaranteed or conditional? When does it expire? Can the lender match a lower rate later? What happens if the mortgage is transferred, refinanced, or paid out early?

Keep the lender’s written offer, fee schedule, and contract beside your completed worksheet. Recheck every figure after the October 28 announcement, but do not assume the announcement will improve or worsen every available product.