The Bank of Canada rate and your mortgage

On September 2, 2026 the Bank of Canada held the target for the overnight rate at 2.25%. The Bank Rate was 2.50% and the deposit rate was 2.20%. The next scheduled announcement is October 28, 2026, and the Monetary Policy Report comes out the same morning. The Bank's policy-rate page shows the target at 2.25% at every fixed announcement from January 28, 2026 through that September hold. A change, when there is one, takes effect the day after the announcement. The decision is released at 9:45 a.m. Eastern time.

Those three rates are how the Bank keeps the overnight market inside a corridor. The target is the middle. The Bank Rate, a quarter point higher, is what the Bank charges on overnight loans to financial institutions. The deposit rate, set a little under the target, is what it pays on deposits. None of them is a five-year mortgage. A borrower who hears "rates are 2.25%" and expects a 2.25% mortgage is reading the wrong market. The September 2026 recap on this site is the hold in plain language. The trends page is what posted mortgage quotes did around it.

Prime is a lender's number. Big-bank prime on this site is 4.45%, which is the policy rate plus 2.20%. The Bank does not publish prime. Lenders move it, usually by the same amount as the target and usually the next day, and they do not have to. TD publishes a mortgage prime of its own, separate from the headline prime used here, so a discount of "prime minus 0.60" is a different rate at TD than at a bank using 4.45%. Read the definition in the commitment before you compare two variable specials.

The Bank published the 2026 schedule on August 6, 2025. There are eight fixed announcement dates. Four of them, January, April, July, and October, also release the Monetary Policy Report. The other four are an announcement without that report. The Bank can still move between dates. It treats that as exceptional. The schedule is the ordinary calendar. The same policy-rate page posts the 2027 dates. The first of those is January 27, 2027.

From January through September 2026 the target did not move. October 28 and December 9 were still ahead when this page was reviewed. A renewal that matures in the last week of October is not waiting on the overnight rate for a fixed quote. It is waiting on the lender's funding cost that week, which may already have moved. The renewal playbook is the shopping window. The renewal offer checker places one offer against rates self-reported by Canadian borrowers online. It does not predict the October decision.

A variable-rate mortgage in Canada is a contract rate expressed as prime minus a discount, or sometimes prime plus a premium. When the lender changes prime, the contract rate changes by the same amount if the discount stays put. The discount is the part you negotiate. The prime is the part the lender resets. FCAC describes the same link for a HELOC: the rate is typically based on the lender's prime, the lender may change it, and a federally regulated lender has to give written notice within 30 days of a change. A HELOC priced as prime plus a margin gets more expensive the day prime rises, on the balance you have actually drawn. You do not pay interest on the undrawn limit.

The rate file's RBC high-ratio 5-year variable special is 3.85%, which is 4.45% minus 0.60%. On a $440,000 balance and a 25-year amortization, the opening payment on this site's monthly formula is $2,286. A quarter-point rise in prime, passed through in full, takes the contract to 4.10%. If the payment adjusts, it becomes $2,347, about $61 more a month. A full point, to 4.85%, takes an adjustable payment to $2,534, about $248 more. Those are illustrations at the opening balance, as if the rise happened before any principal was paid. A later rise is calculated on whatever you still owe.

Reported medians are a different shelf. The file dated October 26, 2026 shows a rounded 5-year variable median of 3.60% (N = 120) and a rounded 5-year fixed median of 4.35% (N = 40), insured status not stated. Use the variable page for posted variable specials and the 5-year fixed page for the fixed ones. Real mortgage rates is the reported distribution. The fixed versus variable guide is the term choice. The payment calculator will reprice an adjustable payment. It will not know whether your contract adjusts.

Lenders sell two different variable contracts, and the advertisements use the names loosely. On an adjustable-rate mortgage the payment changes when the rate changes, and the amortization stays on schedule. On a variable-rate mortgage with a fixed payment, the payment stays put. More of it goes to interest when prime rises, and the amortization stretches. FCAC says a federally regulated lender has to disclose, for a fixed-payment variable mortgage, the rate at which the payment would no longer cover the interest due. That rate is the trigger rate. Past the trigger, unpaid interest is added to the balance. The loan is in negative amortization. The lender can require a higher payment, a lump sum, or a conversion to a fixed rate. Extending the amortization, if any room remains, avoids the higher payment and raises the interest you will pay.

On the RBC special above, the opening payment of $2,286 covers the interest until the rate reaches about 6.24%. That is 2.39% above the contract. The figure is this page's illustration: one month of simple interest on the opening balance, set equal to the payment. The contract's trigger uses the lender's own formula, often with semi-annual compounding, and it changes as the balance changes. Ask for the number in the disclosure. Do not use 6.24% as yours. After a quarter-point rise, about $783 of the opening payment would still be principal. After a full point, about $508 would. This particular discount is not near its trigger.

A payment that was set at a much lower rate can be. Suppose the same $440,000 had been amortized at 1.50%, an example rate and not a figure from the rate file. The payment would be $1,760 and the illustrated trigger about 4.80%. At an example contract rate of 5.50%, monthly interest on the opening balance would exceed that payment by about $257. That is the shape of a trigger problem: the payment belongs to an old rate, and the contract rate has moved past the point where interest fits inside it. A borrower in that position should call the lender before the unpaid interest compounds. The stress test does not measure this. It measured whether you qualified at the start.

A lender funding a five-year fixed mortgage is promising a rate for five years. The cost of that promise tracks the five-year Government of Canada bond, plus a spread for the lender's own funding, the cost of securitization or deposits, and the risk of the loan. The overnight rate can sit still while that bond yield moves. The September 2, 2026 announcement said long-term bond yields had moved up globally, including in Canada, even as the target was held. The release did not print a yield. This page will not invent one. The fact that matters for a borrower is the direction the Bank itself reported: funding costs for longer terms rose during a hold.

That is why a fixed special on the 5-year fixed table can change on a Tuesday when the Bank's next meeting is weeks away, and why it can change again on the morning of a hold. Insured and uninsured specials do not have to move together. A high-ratio loan can be sold into a different funding program than an uninsured one. Check both columns on the insured and uninsured pages. The posted versus discounted guide explains why the posted rate, which feeds many break penalties, is a third number again.

Variable borrowers feel the decision in prime. Fixed borrowers who are already signed feel nothing until renewal, unless they break the term. Fixed borrowers who are shopping feel the bond market immediately. If your maturity is October 28, get the fixed quote before the morning of the announcement and ask how long it is good for. A hold will not rewind a quote that was repriced last week. The CMHC calculator does not belong in this decision unless the mortgage you are signing is a new high-ratio purchase. A renewal of a loan that is already insured does not generate a new premium.

Start with the three rates in the first paragraph of the release, and with the date of the next announcement in the information note. Then read one sentence on inflation and one on growth, because those are what the Bank says it will watch. Skip any sentence that tells you what the Bank will do in December. The Bank's own line on September 2 was that it was prepared to adjust policy as needed. That is not a path for your payment.

If you have an adjustable mortgage, multiply the change in prime, once your lender announces it, by the balance and divide by 12 for a rough monthly interest change. The payment change is close to that on a long amortization and a bit different on a short one, because principal is in the payment too. The calculator is the exact figure. If you have a fixed-payment variable mortgage, ask whether the new rate is still under the trigger printed in your disclosure. If you have a fixed term with years left, the decision does not reprice you. If you are renewing or buying, open the rate tables after the lender has had a day to move prime, and open them for fixed rates without waiting.

The lender comparison matters on decision day because a monoline and a bank do not post on the same clock. A credit union is not bound by OSFI's guideline the way a federal bank is, and its prime can be its own. The contract you sign still has to say which index it uses. Bring the index, the discount, the payment rule, and the trigger to the conversation. Leave the overnight rate in the press release.

A HELOC does not wait for renewal. Interest on the amount you have drawn moves with prime, often the day after the decision. Undrawn room does not accrue interest, so a headline overstates the bill when the limit is large and the balance is small. FCAC's HELOC page describes the product. The renewal, refinance, and HELOC guide is the choice between that limit and a new amortizing loan. Prime on this site is 4.45% after the September hold. A margin of prime plus 1.00 is an example, not a posted HELOC grid, and it would price at 5.45%. The commitment names the margin.

The target, the Bank Rate, the deposit rate, and the next date are the September 2, 2026 release. The eight dates are the Bank's 2026 schedule. Trigger-rate duties are FCAC's. The payment arithmetic uses this site's monthly formula.

• Bank of Canada, September 2, 2026. Target 2.25%. Bank Rate 2.50%. Deposit rate 2.20%. Next announcement October 28, 2026.
• Policy interest rate, including the 2026 decisions through September and the note that a change takes effect the next day.
• 2026 announcement schedule, published August 6, 2025.
• FCAC on trigger rates and the variable-rate disclosure.