Mortgage Rate Update: No News Is Good News
July 15, 2026
September 2, 2026
Bank of Canada Mortgage Rate Update
The Bank of Canada left its overnight rate unchanged at 2.25% today, meaning prime at the Big 6 banks is 4.45%.
For anyone waiting for another round of rate cuts, that may feel disappointing.
But I think there’s another way to look at it.
The Bank isn’t holding rates because the economy is stuck. It’s holding rates because the economy is actually starting to look healthier.
And that is probably more important than another quarter-point rate cut.
The Quick Version:
A few things stood out in today’s announcement:
- Canada’s economy is getting stronger. GDP grew 3.3% in the second quarter, with consumer spending, exports and business investment all improving.
- The U.S. economy remains strong too. Consumer spending and AI-related investment continue to drive growth.
- The labour market is improving, but there is still enough slack in the economy to keep wage growth from becoming a major inflation problem.
- Inflation is still being driven largely by energy. Excluding gasoline, inflation was 2.2%, while core inflation remained close to 2%.
- The Canadian dollar has strengthened slightly as the U.S. dollar weakened.
- Trade remains the wild card. New U.S. tariffs and Canadian counter-tariffs could weaken growth while simultaneously putting upward pressure on prices.
In other words, things are improving.
Not booming.
But improving.
Maybe No Rate Cut Is Good News?
There seems to be a growing belief that the Bank of Canada needs to lower rates to give Canadians confidence to buy homes.
I think that gets things a little backwards.
The Bank of Canada’s job isn’t to stimulate the housing market. Its job is to keep inflation under control while supporting the broader economy.
Confidence ultimately comes from people feeling secure in their jobs, incomes and financial outlook.
And on that front, the economic picture is getting better.
Consumer spending is growing. Businesses are investing again. Exports have improved. Resource stocks have had a resurgence as global demand reminds us that Canada produces a lot of things the world actually needs.
Even the Canadian dollar’s recent strength tells an interesting story.
The U.S. dollar is traditionally viewed as a safe-haven currency. When global investors become more confident, some of that money tends to move elsewhere in search of opportunity.
That doesn’t mean everything is suddenly perfect.
It does suggest the world feels a little less scary than it did a few months ago.
Inflation Hasn’t Disappeared
This is where the rate story gets more interesting.
Higher oil prices haven’t meaningfully spread into the rest of the economy yet.
The word yet matters.
Government debt also continues to grow dramatically around the world. And over the long run, inflation makes that debt easier to carry because tomorrow’s dollars are worth less than today’s.
That doesn’t mean we’re heading toward runaway inflation.
But it may mean the ultra-low interest rate environment that followed the 2008 financial crisis isn’t a particularly useful benchmark anymore.
Barring a major economic shock, I wouldn’t be planning my finances around the assumption that dramatically lower rates are coming to rescue us.
What Does This Mean For Your Mortgage?
This might be the more important question:
If rates stay somewhere around today’s levels for the next several years, does your mortgage still work?
If the answer is yes, great.
If it’s uncomfortable, now is the time to make changes rather than waiting and hoping rates solve the problem for you.
There are a few strategies worth thinking about.
Make your mortgage more efficient:
There are ways to use cash flow more effectively, improve tax efficiency in certain situations and accelerate mortgage repayment. We now even have access to a mortgage structure that functions much like your bank account, allowing every paycheque to temporarily reduce the amount of interest-bearing debt.
Mix fixed and variable:
It doesn’t have to be an all-or-nothing decision. We have access to a lender that offers mortgage structures that combine fixed-rate borrowing, variable-rate borrowing, and a line of credit under one mortgage.
Think beyond real estate:
If most of your net worth is tied up in your home or investment properties, it may be worth looking at whether some of that equity should be working elsewhere too. Diversification doesn’t necessarily mean selling real estate. Sometimes it simply means making the equity you already have more productive.
Bottom Line:
The economy is recovering.
Inflation is manageable, but it hasn’t disappeared.
And the era of extremely cheap money may be behind us for a while.
Rather than waiting for rates to go back to where they used to be, this may be the time to ask a different question:
What changes should I make if today’s rates are the new normal?
That’s a much more useful place to start.
If you’re not sure, let’s take a look at it together. A quick mortgage review can help you understand what’s working, what isn’t, and whether there are smarter ways to manage your debt, cash flow, and equity.
Book a 15-minute Discovery Call and let’s make sure your mortgage is ready for what comes next.
The next Bank of Canada meeting is October 28th, 2026
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