Rates & the Bank of Canada
The Bank of Canada decides tomorrow. Here’s what it means for your mortgage.
Markets are near-certain on a fifth straight hold at 2.25%, and for the first time in two years, the small risk priced in is a hike, not a cut. Here’s what that means if you own, renew, or plan to buy in Ottawa this year.
Where things stand
The Bank of Canada’s policy rate sits at 2.25%, where it has been since the quarter-point cut last October. The Bank held again on April 29, and tomorrow’s announcement (June 10) is widely expected to make it five holds in a row; bond markets price the odds of a move at almost nil, with about a 3% chance of a quarter-point hike and essentially zero chance of a cut.
That tiny hike probability is worth pausing on. For two years, every Bank of Canada meeting came with hopes of cheaper money. The conversation has changed: the Bank now expects inflation to average 2.3% in 2026, nudged up from 2.0%, largely on the back of the global oil shock, at the same time as Statistics Canada reported the economy shrank slightly for a second consecutive quarter. A central bank squeezed between soft growth and sticky prices tends to do exactly what markets expect tomorrow: nothing.
What a hold means in practice
- Variable-rate holders: no change. Prime stays at 4.45%, so a typical prime − 0.75% variable keeps paying 3.70%. The case for variable right now rests on flexibility (smaller breakage penalties), not on betting rates fall further.
- Fixed-rate shoppers: the Bank’s overnight rate isn’t what sets your 5-year fixed; the bond market is. Insured 5-year fixed rates around 3.99% are available today, and they move with bond yields week to week regardless of what the Bank announces.
- Buyers: Ottawa’s market is giving you time. May’s average price was $721,270, down 1.0% from a year ago, with about three months of inventory: balanced conditions where a pre-approval and a 120-day rate hold let you shop without racing the market.
The group that should act this week: 2026 renewals
A huge share of Canadian mortgages set up during the ultra-low years of 2020–2021 renew through 2025 and 2026. If you took a 5-year fixed in mid-2021 at around 2.2%, your renewal is landing right about now, at rates nearly two points higher.
| Renewing a $450,000 balance, 20 years remaining | |
|---|---|
| Payment at your 2021 rate (2.19%) | ≈ $2,315/mo |
| Payment at today’s 3.99% | ≈ $2,717/mo |
| Difference | ≈ +$400/mo |
That jump stings, but it’s the negotiable kind. Your current lender’s first renewal letter is rarely their best rate; it’s priced for people who sign and mail it back. Renewal is the one moment you can switch lenders with minimal cost, so it deserves a second opinion before you sign.
Our read
Don’t build your mortgage strategy around guessing the Bank’s next move; even the professionals pricing billions in bonds put only single-digit odds on anything happening tomorrow. Build it around your own numbers: how long you’ll hold the property, how much payment room you have, and what breaking the mortgage would cost if life changes. Those are questions a 15-minute conversation answers. Run your own scenario in our refinance calculator, then send us your renewal letter; it takes us about a day to tell you whether you can do better.
Renewal landing this year?
Send us the letter before you sign anything. We’ll check it against the market’s best lenders and tell you in plain language whether the offer is worth taking.
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Rates shown are illustrative and change daily; payment figures use Canadian semi-annual compounding. This is general information, not financial advice.