The overnight rate stayed at 2.25%. Mortgage pricing didn’t.
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It’s been a week since the Bank of Canada held its overnight rate at 2.25%. That’s enough time for the headlines to fade and for the part that actually matters to come into focus. The Bank didn’t cut. It didn’t hike. It also didn’t sound relaxed. Inflation risk hasn’t gone away, trade uncertainty hasn’t either, and the Bank said plainly that it’s prepared to move — in either direction — if the outlook changes. Meanwhile, fixed mortgage pricing follows the bond market, not the Bank’s announcement. So “the Bank held” doesn’t mean “mortgage rates are staying put.”
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What I’m watching now
Three things matter more than the headline.
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1. Inflation The Bank is watching it closely, and so am I. If inflation stays sticky, cuts get harder to justify and a hike stops being unthinkable. |
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2. Bond yields This is what actually sets fixed mortgage pricing. Fixed rates can move before the Bank moves, after it moves, or while it does nothing at all. |
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3. The next few weeks The Bank’s next decision isn’t until late October. That’s plenty of time for inflation, employment, bond markets and global events to shift the outlook. |
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My take
Don’t build the whole strategy around a prediction.
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If you have a mortgage decision coming up, don’t build it around a guess about the Bank’s next move. Nobody calls that consistently, including the people paid to. Look at what’s available today, how much flexibility you need, how long you expect to keep the mortgage, and what happens to you if rates move in either direction. Sometimes that’s fixed. Sometimes it’s variable. Sometimes it’s a split. Last month, a majority of my clients took the 3-year fixed rate special because it was close enough to the 4% mark that it felt reasonable for a fixed. Now that those specials have expired, variable is looking more attractive. The rate matters, obviously. So does the penalty, the lender’s flexibility, your plans for the next few years, and how the mortgage fits the rest of your financial picture. That’s usually where the real decision is. |
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From a recent client
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Plan the move. Manage the risk. |
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The Bank of Canada maintained its target for the overnight rate at 2.25% on September 2, 2026. Mortgage rates and lending products may change without notice. Every file is underwritten on its own merits and is subject to lender approval, borrower qualification, property eligibility and applicable lending guidelines. Nothing in this email is an offer of credit or a commitment to lend. E.&O.E. Olympic Mortgage Corporation, Victoria BC | BCFSA #145716 |
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