Bank of Canada Holds Rate at 2.25% — September 2, 2026

Sarah Hainsworth • September 2, 2026

The Bank of Canada announced today that it is holding its target for the overnight rate at 2.25%, with the Bank Rate at 2.5% and the deposit rate at 2.20%. While Canada's economic recovery is broadening, a new layer of uncertainty has entered the picture. Here is what happened and what it means for your mortgage.

What the Bank of Canada Said

A More Complex Global Picture

Two significant developments are shaping today's decision. First, the ongoing Middle East conflict continues to keep energy prices elevated. Second, trade talks between Canada and the United States have broken down, triggering new US tariffs and Canadian counter-measures. Both situations remain fluid and are being watched closely.

Despite these headwinds, the global economy has shown resilience. US growth remains solid, driven by consumer spending and AI investment. The euro area grew stronger than expected in the second quarter. China's economy slowed. Overall, global growth is broadly in line with the Bank's July projections. That said, inflation in most countries remains elevated due to high oil prices and elevated margins for refined energy products.

Financial conditions have tightened since July. Long-term bond yields have moved up globally, including in Canada. The Canadian dollar has appreciated slightly on US dollar weakness.

Canada's Economy Is Recovering

The good news is that Canada's economy delivered a strong second quarter. GDP grew 3.3% after a very weak start to the year. The pickup was broad-based. Consumer spending showed solid gains. Housing activity rebounded after several weak quarters. Exports and business investment were both up sharply.

The labour market has also improved. The unemployment rate edged down to 6.4% in July. That said, demand for labour remains subdued and there is still excess supply in the economy overall.

The Bank's view is that Canada's recovery is broadening. That is a meaningful and positive shift from earlier in the year.

Inflation Remains Elevated

CPI inflation has been hovering around 3% in recent months, largely driven by persistently high gasoline prices tied to the Middle East conflict. The encouraging detail is that inflation excluding gasoline was 2.2% in July, and core inflation measures remained close to 2%. So far, higher energy prices have not spread broadly into other consumer prices.

However, the Bank is watching this carefully. The longer oil prices and elevated refinery margins persist, the greater the risk that energy costs begin feeding into the prices of other goods and services. On top of that, new US tariffs and Canadian counter-tariffs could push up costs for some businesses and eventually flow through to consumers.

Why the Bank Held

With the economy and inflation evolving broadly as projected in July, Governing Council agreed to leave the policy rate unchanged at 2.25%. However, the Bank was clear that upside risks to inflation have increased, and that new tariffs create additional uncertainty for the growth outlook. The Bank is prepared to adjust monetary policy as conditions evolve and remains committed to keeping inflation under control.

What This Means for Mortgage Holders and Buyers

A rate hold means no immediate change to variable-rate mortgage payments or home equity lines of credit (HELOCs) tied to the prime rate. The prime rate remains at 4.45%.

Today's announcement carries two messages at once. On one hand, Canada's economy is genuinely recovering and growing. On the other hand, trade uncertainty and elevated energy prices are creating new risks that the Bank is watching carefully. This is not a straightforward picture, and it is exactly the kind of environment where having a clear mortgage strategy matters most.

Whether you are renewing, purchasing, or simply trying to understand what is ahead, now is a good time to have a conversation. The next rate decision is only weeks away, and the landscape could look different by then.

The next scheduled rate announcement is October 28, 2026 , at which point a new Monetary Policy Report will also be released.

Every borrower's situation is unique. If you have questions about how today's announcement affects your mortgage, reach out. We would love to help you navigate your options.

Information sourced from the Bank of Canada's official press release dated September 2, 2026.

Sarah Hainsworth
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Monthly vs. Biweekly Mortgage Payments: Which Is Better?

By Sarah Hainsworth • August 26, 2026
How Mortgage Payment Frequency Affects What You Pay Over Time You’ve probably heard the saying that there are two certainties in life: death and taxes. When it comes to your mortgage, there’s really just one certainty—you’ll repay what you borrow, plus interest. What is flexible, though, is how often you make your mortgage payments. And that choice can have a meaningful impact on how quickly you pay down your mortgage and how much interest you pay over time. The Six Mortgage Payment Frequencies Most lenders offer the following payment options: Monthly – 12 payments per year Semi-monthly – 24 payments per year Bi-weekly – 26 payments per year Weekly – 52 payments per year Accelerated bi-weekly – 26 payments per year Accelerated weekly – 52 payments per year Standard Payment Frequencies The first four options are designed to align with how you get paid. For example: Paid monthly? Monthly mortgage payments may make sense. Paid every two weeks? Bi-weekly payments can align nicely with your cash flow. With these standard options, regardless of how often you pay, the total amount paid over the year is the same —it’s simply divided into more frequent payments. What Makes “Accelerated” Payments Different Accelerated payments work differently—and this is where the real savings happen. With accelerated bi-weekly or accelerated weekly payments, you’re paying a slightly higher amount each time. That extra money goes directly toward reducing your mortgage principal, which lowers the interest you’ll pay over the life of the mortgage. A Simple Example Let’s assume a $1,000 monthly mortgage payment: Monthly: $1,000 once per month = $12,000 per year Semi-monthly: $500 twice per month = $12,000 per year Bi-weekly: $1,000 × 12 ÷ 26 = $461.54 every two weeks = $12,000 per year Accelerated bi-weekly: $1,000 ÷ 2 = $500 every two weeks = $13,000 per year With accelerated bi-weekly payments, you effectively make two extra payments per year without having to think about it. Those extra payments reduce your principal faster, which lowers interest costs over time. Accelerated weekly payments work the same way—you just make smaller payments more frequently. Why This Matters Long Term While it’s difficult to calculate exact savings due to variables like interest rates, terms, and amortization changes, maintaining an accelerated payment schedule over the life of your mortgage can reduce your amortization by up to three years and save a significant amount of interest. The Bottom Line Accelerated payments are a simple, automatic way to lower your overall cost of borrowing—without needing to make lump-sum payments or drastically change your budget. If you’d like to see how different payment frequencies would impact your mortgage specifically, feel free to reach out anytime. I’d be happy to walk through the numbers with you and help you choose the option that fits your goals.

How to Maximize Your Mortgage Renewal Opportunity

By Sarah Hainsworth • August 19, 2026
Your Lender Is Not Obligated to Renew Your Mortgage Many homeowners assume that if they’ve made every mortgage payment on time, their lender is automatically required to renew their mortgage at the end of the term. That’s a common belief—but it isn’t true. When you sign a mortgage, you’re agreeing to a contract for a specific term . Once that term ends, the lender has the legal right to either renew the mortgage or call the loan . There is no obligation to offer a renewal. In practice, most lenders do renew mortgages—but certain situations can prevent that from happening. Reasons a Lender May Decline to Renew A lender may choose not to renew if: Mortgage payments were missed during the term A bankruptcy or consumer proposal has occurred There is a separation or divorce Employment or income has changed A borrower on the mortgage has passed away The lender no longer prefers the property’s location or market The lender is no longer licensed to lend in Canada Even one of these factors can change how a lender views the risk. Why This Matters Because renewal is not guaranteed, waiting until the last minute can put you in a difficult position. Understanding this reality early gives you time and control. How to Protect Yourself at Renewal The best approach is to be proactive. Ideally, you should begin reviewing your options 120 days before your mortgage term ends . This gives you enough time to explore alternatives and make informed decisions—rather than reacting under pressure. Even if your current lender offers a renewal, that’s just one option , not automatically the best one. The lender that was right for you years ago may no longer offer the most competitive rate, terms, or flexibility today. The goal at renewal isn’t convenience—it’s reducing your total cost of borrowing and choosing terms that align with your current situation. Why Work With an Independent Mortgage Professional Working with an independent mortgage professional ensures someone is advocating for you , not the lender. Instead of being limited to one set of products, you can compare options across multiple lenders and choose the solution that best protects your interests. Final Thoughts Whether your lender is offering a renewal or not, the smartest move is to review all your options before signing anything. If your mortgage is coming up for renewal—or if you want to plan ahead—feel free to connect anytime. I’d be happy to help you protect your options and make a confident decision.