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Canada's Interest Rate Pause: What it Means for Mortgages
25 Aug
Summary
- Bank of Canada's next interest rate decision is September 2.
- Key policy rate has been stable at 2.25% since October 2025.
- Rate holds impact variable mortgage payments and fixed renewals.
As of August 25, 2026, Canadian mortgage holders and prospective homebuyers are anticipating the Bank of Canada's upcoming interest rate decision on September 2. Policymakers are expected to maintain the key policy rate at 2.25% for the sixth consecutive announcement.
This rate has remained unchanged since the Bank of Canada's last adjustment, a 25-basis-point reduction in October 2025. A further pause would signal continued monetary policy stability, carrying significant implications for various mortgage types.
For variable-rate mortgage holders, an unchanged policy rate means prime lending rates will also remain stable at 4.45%. Monthly payments for those with floating payments will stay the same. For those with fixed payments, the balance of principal and interest in monthly payments will not shift, preventing changes to amortization schedules.
Fixed-rate mortgage holders will not experience an immediate impact on their current contracts. However, a continued rate hold provides a clearer outlook for those renewing their mortgages or seeking new ones, as fixed rates are primarily influenced by Canadian benchmark bond yields.
