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

Shawn Johnson • 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.

Shawn Johnson

Senior Mortgage Specialist

Is Refinancing Your Mortgage a Good Way to Consolidate Debt?

By Shawn Johnson • August 26, 2026
If you're a homeowner juggling multiple debts, you're not alone. Credit cards, car loans, lines of credit—it can feel like you’re paying out in every direction with no end in sight. But what if there was a smarter way to handle it? Good news: there is. And it starts with your home. Use the Equity You’ve Built to Lighten the Load Every mortgage payment you make, every bit your home appreciates—you're building equity. And that equity can be a powerful financial tool. Instead of letting high-interest debts drain your income, you can leverage your home’s equity to combine and simplify what you owe into one manageable, lower-interest payment. What Does That Look Like? This strategy is called debt consolidation , and there are a few ways to do it: Refinance your existing mortgage Access a Home Equity Line of Credit (HELOC) Take out a second mortgage Each option has its own pros and cons, and the right one depends on your situation. That’s where I come in—we’ll look at the numbers together and choose the best path forward. What Can You Consolidate? You can roll most types of consumer debt into your mortgage, including: Credit cards Personal loans Payday loans Car loans Unsecured lines of credit Student loans These types of debts often come with sky-high interest rates. When you consolidate them into a mortgage—secured by your home—you can typically access much lower rates, freeing up cash flow and reducing financial stress. Why This Works Debt consolidation through your mortgage offers: Lower interest rates (often significantly lower than credit cards or payday loans) One simple monthly payment Potential for faster repayment Improved cash flow And if your mortgage allows prepayment privileges—like lump-sum payments or increased monthly payments—those features can help you pay everything off even faster. Smart Strategy, Not Just a Quick Fix This isn’t just about lowering your monthly bills (although that’s a major perk). It’s about restructuring your finances in a way that’s sustainable, efficient, and empowering. Instead of feeling like you're constantly catching up, you can create a plan to move forward with confidence—and even start saving again. Here’s What the Process Looks Like: Review your current debts and cash flow Assess how much equity you’ve built in your home Explore consolidation options that fit your goals Create a personalized plan to streamline your payments and reduce overall costs Ready to Regain Control? If your debts are holding you back and you're ready to use the equity you've worked hard to build, let's talk. There’s no pressure—just a practical conversation about your options and how to move toward a more flexible, debt-free future. Reach out today. I’m here to help you make the most of what you already have.

Wait! Are You Really Ready to Buy That Home?

By Shawn Johnson • August 19, 2026
So, you’re thinking about buying a home. You’ve got Pinterest boards full of kitchen inspo, you’re casually scrolling listings at midnight, and your friends are talking about interest rates like they’re the weather. But before you dive headfirst into house hunting— wait . Let’s talk about what “ready” really means when it comes to one of the biggest purchases of your life. Because being ready to own a home is about way more than just having a down payment (although that’s part of it). Here are the real signs you're ready—or not quite yet—to take the plunge into homeownership: 1. You're Financially Stable (and Not Just on Payday) Homeownership isn’t a one-time cost. Sure, there’s the down payment, but don’t forget about: Closing costs Property taxes Maintenance & repairs Insurance Monthly mortgage payments If your budget is stretched thin every month or you don’t have an emergency fund, pressing pause might be smart. Owning a home can be more expensive than renting in the short term—and those unexpected costs will show up. 2. You’ve Got a Steady Income and Job Security Lenders like to see consistency. That doesn’t mean you need to be at the same job forever—but a reliable, documented income (ideally for at least 2 years) goes a long way in qualifying for a mortgage. Thinking of switching jobs or going self-employed? That might affect your eligibility, so timing is everything. 3. You Know Your Credit Score—and You’ve Worked On It Your credit score tells lenders how risky (or trustworthy) you are. A higher score opens more doors (literally), while a lower score may mean higher rates—or a declined application. Pro tip: Pull your credit report before applying. Fix errors, pay down balances, and avoid taking on new debt if you’re planning to buy soon. 4. You’re Ready to Stay Put (At Least for a Bit) Buying a home isn’t just a financial decision—it’s a lifestyle one. If you’re still figuring out your long-term plans, buying might not make sense just yet. Generally, staying in your home for at least 3–5 years helps balance the upfront costs and gives your investment time to grow. If you’re more of a “see where life takes me” person right now, that’s totally fine—renting can offer the flexibility you need. 5. You’re Not Just Buying Because Everyone Else Is This one’s big. You’re not behind. You’re not failing. And buying a home just because it seems like the “adult” thing to do is a fast way to end up with buyer’s remorse. Are you buying because it fits your goals? Because you’re ready to settle, invest in your future, and take care of a space that’s all yours? If the answer is yes—you’re in the right headspace. So… Are You Ready? If you’re nodding along to most of these, amazing! You might be more ready than you think. If you’re realizing there are a few things to get in order, that’s okay too. It’s way better to prepare well than to rush into something you're not ready for. Wherever you’re at, I’d love to help you take the next step—whether that’s getting pre-approved, making a plan, or just asking questions without pressure. Let’s make sure your homebuying journey starts strong. Connect anytime—I’m here when you’re ready.