Updated November 2026 · Estima.ca research
Bank of Canada rate forecast for 2026
The Bank of Canada held its policy interest rate at 2.25% at the July 15, 2026 decision, matching where the rate has settled after a long easing cycle. The accompanying Monetary Policy Report described a Canadian economy that is finally showing signs of improvement after a year of stagnation, with growth expected to pick up into 2027.
For anyone shopping for a mortgage, refinancing, or approaching renewal, the tone of that report matters as much as the number: the Bank sees inflation easing gradually from its recent peak and views the current setting as broadly appropriate.
What the Bank actually said in July 2026
Governing Council held the overnight rate at 2.25% and delivered three key messages: growth appears to have resumed after stalling for a year, US trade policy remains a headwind but consumers are more active, and the Bank will not let higher oil prices become persistent inflation.
The MPR's own projections show GDP growth stronger in 2027 and 2028 than in 2026, with near-term inflation slightly above target but expected to ease back.
What forecasters expect next
Consensus among Canadian bank economists in mid-2026 leaned toward a hold-and-wait Bank, with the next move — up or down — dependent on whether inflation cools as projected and how the US-Canada trade relationship evolves.
A stable overnight rate would keep prime near 4.45% and variable-rate mortgages priced accordingly. Fixed rates would continue to move with 5-year Government of Canada bond yields rather than the policy rate itself.
What this means for your mortgage decision
A stable-to-lower path favours variable and shorter-fixed terms, because they let you benefit if the Bank cuts again. A stable-to-higher path favours a 5-year fixed, which locks your payment through the uncertainty.
Because the current market is genuinely two-sided, 3-year fixed terms have been popular in 2026 — they let borrowers avoid a long lock-in while still getting payment certainty.
FAQ
- What is the Bank of Canada policy rate today?
- The policy rate was held at 2.25% at the July 15, 2026 meeting, according to the Bank's own statement.
- Will the Bank of Canada cut rates again in 2026?
- The July 2026 MPR did not signal an imminent cut. The Bank described the current setting as appropriate and said future moves would depend on inflation and trade data.
- How does the policy rate affect my mortgage?
- It directly moves prime, which sets variable-rate mortgages and HELOCs. Fixed rates are driven by 5-year Government of Canada bond yields, which respond to Bank guidance but move independently.
- Should I go fixed or variable in 2026?
- It depends on your risk tolerance and payment room. Estima.ca's fixed-vs-variable guide walks through the trade-off in detail.