On September 2, 2026, the Bank of Canada held its policy rate at 2.25%, a seventh consecutive hold since the cut of October 2025, with a bank rate of 2.5% and a deposit rate of 2.20%; the next decision comes on October 28, 2026, together with the Monetary Policy Report. The policy rate directly guides the banks' prime rate, at 4.45%, on which variable-rate mortgages and lines of credit are indexed: when the Bank moves a quarter point, your variable follows, usually within days. Fixed rates follow the bond market instead, which anticipates decisions rather than reacting to them: that is why the best insured 5-year fixed, at 4.09% on September 12, 2026, sometimes moves before the announcement itself. This page is updated at every Bank of Canada decision and translates each move into concrete consequences for buyers, sellers and mortgage holders.
The rate today and the decision calendar
The policy rate has been at 2.25% since October 2025: seven consecutive hold decisions, the most recent on Wednesday, September 2, 2026. The next decision is expected on Wednesday, October 28, 2026, together with the Monetary Policy Report, and a final meeting follows in December.
On September 2, 2026, the Governing Council left the rate unchanged, judging that the economy and inflation are evolving broadly as projected in the July Report, while signalling that upside risks to inflation have increased. CPI inflation is running around 3% because of gasoline, but it is 2.2% excluding gasoline, and core inflation measures stayed close to 2% in July. The conflict in the Middle East keeps energy prices high, and new U.S. tariffs as well as Canadian countermeasures have been announced. GDP grew 3.3% in the second quarter, with some rebound in housing activity, and the unemployment rate fell to 6.4% in July.
One detail of the September 2, 2026 press release matters particularly to borrowers: financial conditions have tightened since July and long-term bond yields have risen, including in Canada. Those bonds, not the policy rate, drive fixed mortgage rates. In other words, a policy rate on pause does not stop a fixed rate from climbing, and that is exactly what to watch between now and October 28.
The big banks' prime rate stands at 4.45%, and the best mortgage rates of the moment are tracked continuously on our mortgage rates page, updated at every announcement.
The direct effect on variable rates and lines of credit
Variable-rate products are indexed to prime: a quarter-point cut in the policy rate generally passes through within days to your variable mortgage, your home equity line of credit and your personal lines. On a $400,000 balance, a quarter point represents about $1,000 of interest per year.
With the variable negotiated from about 3.35% on September 12, 2026, well below the comparable fixed, every Bank decision becomes a direct event for variable-rate holders: our fixed or variable guide helps you pick a side.
The indirect effect on fixed rates
Fixed rates follow bond yields, which price in the market's expectations: when a policy rate cut becomes likely, bonds anticipate it and fixed rates slide before the announcement. Conversely, an announcement that was already expected sometimes changes nothing for fixed rates on the day.
That is why waiting for the announcement to lock in a rate is often a poor calculation: the rate hold that comes with a pre-approval protects you against increases while letting you benefit from decreases.
How the Bank decides
The Bank of Canada's mandate targets inflation around 2%. Its decisions weigh observed inflation, employment, growth and the global context: it raises the rate to cool the economy and lowers it to stimulate it. The statements that accompany each decision count as much as the decision itself: they signal the direction of the coming months.
For the real estate market, the mechanics are well known: falling rates bring buyers back and support prices, as the recent activity compiled on our Montreal market page shows.
What to do in your situation
- You are shopping: get a pre-approval with a rate hold now, and watch the announcements while you visit.
- You are on a variable: every announcement affects you; check your cushion in case the trend reverses.
- Your term is maturing: start shopping months ahead; our mortgage penalty guide explains what an early exit costs.
- You are selling: windows of falling rates widen the pool of buyers; the timing of a listing can be planned, see our rate forecast for 2027.
Rates move; your project deserves a plan.
A broker from the team follows the announcements for you and times your purchase or sale to the right tempo, with market numbers in hand. Service in English and French.
Frequently asked questions
What is the Bank of Canada policy rate right now?
The policy rate is 2.25%, held on September 2, 2026 for the seventh consecutive time since the cut of October 2025. The big banks' prime rate stands at 4.45% as a result. The next Bank of Canada decision is scheduled for October 28, 2026, and this page is updated at every announcement.
Does the policy rate influence fixed rates?
Indirectly: fixed rates follow bond yields, which anticipate the Bank's decisions rather than react to them. A widely expected cut is often already priced into fixed rates before the announcement. The variable rate, on the other hand, is directly indexed to prime and moves within days of every change in the policy rate.
Should you wait for a rate cut before buying?
Waiting has a hidden cost: when rates fall, demand returns and prices rise, which often erases the savings hoped for on the rate. The most robust strategy is to get a pre-approval with a rate hold, which protects against an increase while letting you benefit from a decrease, then to buy when the right property comes along.
Published August 17, 2026, updated September 13, 2026, by the Loaa & Manseur team, #1 team at RE/MAX Platine in 2024 and 2025 · Version française de cette page · Tell us about your project