The Bank of Canada Just Held Rates for the Sixth Time in a Row — What It Actually Means If You’re Renewing
A mortgage advisor meeting with homebuyers to discuss mortgage renewal and financing options after the Bank of Canada kept its policy interest rate unchanged.
The Bank of Canada rate hold continued in July. It marked the sixth consecutive decision to keep the policy interest rate unchanged. The decision affects homeowners, buyers, and anyone renewing a mortgage. On July 15, the Bank kept its overnight policy rate at 2.25%. It was the sixth consecutive rate hold. The Bank also signalled that it is still watching global risks before making any changes. Here’s what that actually changes for anyone with a mortgage, or shopping for one.
Bank of Canada Rate Hold: What Happened?
The Bank’s benchmark rate stays at 2.25%, and lender prime rates hold steady at 4.45% as a result. Experts widely expected the decision. The Bank pointed to a strengthening economy and easing inflation. However, it also highlighted geopolitical tensions and trade uncertainty with the US. These risks mean the Bank is not ready to cut rates yet.
If You Have a Variable Rate or a HELOC
Nothing changes. Your lender’s prime rate determines variable mortgage rates and home equity lines of credit(HELOCs). Because the prime rate did not change, your payment and interest portion remain the same.
If You’re Looking at (or Renewing Into) a Fixed Rate
This is where it gets more interesting. The Bank of Canada does not directly set fixed mortgage rates. Instead, they follow government bond yields. Bond yields remain elevated because of inflation risks, oil prices, and global uncertainty. Right now:
- 5-year fixed rates are generally running in the 4.1%–4.4% range
- 5-year variable rates are sitting closer to 3.35%–3.55%
That gap means variable is currently the cheaper option on paper, though it comes with more exposure if the Bank eventually does move.
What’s Next After the Bank of Canada Rate Hold?
The Bank’s next scheduled rate announcement is September 2. Several bank economists currently see the odds tilted slightly toward a future hike rather than a cut, given inflation running a bit above target — though nothing is close to certain this far out. The Bank says it is prepare to raise or lower rates as economic conditions change. A rate holds today does not signal as upcoming rate cut.
FAQ
Will mortgage rates go down soon? Not necessarily. A rate hold means the Bank believes current conditions support keeping rates unchanged. It does not signal a future rate cut.
Should I lock in a fixed rate or go variable? It depends on your risk tolerance and timeline: variable is cheaper right now but more exposed to future rate moves, while fixed offers certainty at a slightly higher starting rate. This is a personal decision that depends on your full financial picture, so it’s worth talking through with a licensed mortgage broker rather than deciding on rate alone.
When’s the next Bank of Canada announcement? September 2, 2026.
Use this article for general information only. Always speak with a licensed mortgage professional for advice about your specific situation.
