Forecast · 2027 · Policy rate · Sources read September 6, 2026
The question is no longer when the Bank will cut, but when it will hike. Here are the dated forecasts, and the cost of each half point on your payment.
The Bank of Canada's policy rate has been 2.25 % since October 2025 and was held for the seventh time on September 2, 2026. For 2027, Desjardins forecasts a 50-basis-point increase in the first half, or 2.75 % by year end, while markets price in a little above 3 %; a Bloomberg survey shows 63 % of economists expect the first hike in the first half of 2027. On a $400,000 mortgage amortized over 25 years, each half point adds about $107 a month to a variable rate. Five-year fixed rates (4.24 % in September 2026) follow bond yields, which the big banks see between 2.95 % and 3.30 % at the end of 2026, and should stay "relatively stable." No forecast brings the policy rate back to the 5 % of 2023.
The Bank of Canada held its policy rate at 2.25 % on September 2, 2026, the seventh consecutive hold since the last cut in October 2025. The rate sits at the lower bound of the range the Bank considers "neutral." The Bank judged the rate "appropriate": second-quarter growth reached 3.3 % annualized, better than the 2.5 % projected, but partly driven by temporary factors, and the new U.S. tariffs of August 22, 2026 cloud the picture. The next decision is October 28, 2026, with updated economic projections.
| Source (date) | End of 2026 | 2027 |
|---|---|---|
| Desjardins, Randall Bartlett (September 2, 2026) | 2.25 %, unchanged | +50 basis points in the first half of 2027, or 2.75 % by year end |
| Financial markets (cited by Desjardins) | 2.25 % | A little above 3 % priced in for 2027 |
| Bloomberg survey (September 2026) | 63 % of economists see a hold through the end of 2026 | First hike expected in the first half of 2027 |
| BMO, CIBC, RBC, TD (forecasts as of July 13, 2026) | 2.25 % | Gradual normalization from the second quarter of 2027 |
| National Bank, Scotiabank (July 13, 2026) | 2.75 % | Earlier hikes than the consensus |
| 5-year Government of Canada bond, end of 2026 (six banks) | 2.95 % (BMO, TD) to 3.30 % (RBC) | Benchmark for 5-year fixed rates |
The "2.75 % to a little above 3 %" range for the end of 2027 sums up the gap between economists (Desjardins at 2.75 %) and markets (above 3 %). Desjardins explains its lower number by permanent tariffs that reduce potential growth and the neutral rate. Nobody forecasts a return to the 5 % of 2023.
In September 2026 a 5-year fixed rate trades around 4.24 % and a variable rate around 3.45 % (prime minus 1.00 %). On a $400,000 mortgage amortized over 25 years:
| Scenario | Rate | Monthly payment | Difference |
|---|---|---|---|
| Variable today | 3.45 % | $1,987 | baseline |
| Variable after +50 basis points (Desjardins 2027 scenario) | 3.95 % | $2,093 | +$107 a month |
| Variable after +100 basis points (market scenario) | 4.45 % | $2,203 | +$216 a month |
| 5-year fixed today | 4.24 % | $2,156 | +$169 a month, but locked until 2031 |
Honest reading: variable stays cheaper than fixed as long as the Bank adds no more than 75 basis points, which no forecast places before 2028. Fixed buys certainty for $169 a month. The mortgage calculator redoes the math with your amount.
That is the dominant scenario: first hike in the first half of 2027 for 63 % of economists surveyed by Bloomberg, 2.75 % by year end per Desjardins, a little above 3 % per markets. The Bank has announced nothing; its next decision is October 28, 2026.
At 3.45 % versus 4.24 % fixed, variable keeps a 79-basis-point head start; it would still win after the 50-basis-point hike Desjardins expects. It loses if the Bank goes beyond 100 basis points, which no published forecast shows. The choice depends on your tolerance for a payment that moves.
October 28, 2026, with the Monetary Policy Report and updated projections. August inflation is released on September 14, 2026.
Also available in French: version française de ce guide.
Published September 6, 2026 by the Loaa & Manseur team, the number 1 team at RE/MAX Platine in 2024 and 2025, 6th RE/MAX team in Quebec, 15th in Canada and in the global top 50 according to the official RE/MAX ranking. Tell us about your project.
Équipe no 1 de RE/MAX Platine en 2024 et en 2025, 6e au Québec, 15e au Canada et dans le top 50 mondial au classement officiel RE/MAX. Réponse en moins de 24 heures, sept jours sur sept.