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

Chad Oyhenart • 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.

CHAD OYHENART

Best Mortgage Options for Canadian Homebuyers

By Chad Oyhenart • October 15, 2026
Thinking of Calling Your Bank for a Mortgage? Read This First. If you're buying a home or renewing your mortgage, your first instinct might be to call your bank. It's familiar. It's easy. But it might also cost you more than you realize—in money, flexibility, and long-term satisfaction. Before you sign anything, here are four things your bank won’t tell you—and four reasons why working with an independent mortgage professional is the smarter move. 1. Your Bank Offers Limited Mortgage Options Banks can only offer what they sell. So if your financial situation doesn’t fit neatly into their guidelines—or if you’re looking for competitive terms—you might be out of luck. Working with a mortgage broker? You get access to mortgage products from hundreds of lenders : major banks, credit unions, monoline lenders, alternative lenders, B lenders, and even private funds. That means more options, more flexibility, and a much better chance of finding a mortgage that fits you. 2. Bank Reps Are Salespeople—Not Mortgage Strategists Let’s be honest: most bank mortgage reps are trained to sell their employer’s products—not to analyze your financial goals or tailor a long-term mortgage plan. Their job is to generate revenue for the bank. Independent mortgage professionals are different. We’re not tied to one lender—we’re tied to you. Our job is to shop around, negotiate on your behalf, and recommend the mortgage that offers the best balance of rate, terms, and flexibility. And yes, we get paid by the lender—but only after we find you a mortgage that works for your situation. That creates a win-win-win: you get the best deal, we earn our fee, and the lender earns your business. 3. Banks Don’t Lead with Their Best Rate It’s true. Banks often reserve their best rates for those who ask for them—or threaten to walk. And guess what? Most people don’t. Over 50% of Canadians accept the first renewal offer they get by mail. No questions asked. That’s exactly what the banks count on. Mortgage professionals don’t play that game. We start by finding lenders offering competitive rates upfront, and we handle the negotiations for you. There’s no guesswork, no pressure, and no settling for less than you deserve. 4. Bank Mortgages Are Often More Restrictive Than You Think Not all mortgages are created equal. Some come with hidden traps—especially around penalties. Ever heard of a sky-high prepayment charge when someone breaks their mortgage early? That’s often due to something called an Interest Rate Differential (IRD) —and big banks are notorious for using the harshest IRD calculations. When we help you choose a mortgage, we don’t just focus on the interest rate. We look at the whole picture, including: Prepayment privileges Penalty calculations Portability Future flexibility That way, if your life changes, your mortgage won’t become a financial anchor. A Quick Recap What your bank typically offers: Only their own limited mortgage products Sales-focused representatives, not mortgage strategists Default rates that aren’t usually their best Restrictive contracts with high penalties What an independent mortgage professional delivers: Access to over 200 lenders and customized mortgage solutions Personalized advice and long-term financial strategy Competitive rates and terms upfront Transparent, flexible mortgage options designed around your needs Let’s Talk Before You Sign Your mortgage is likely the biggest financial commitment you’ll ever make. So why settle for a one-size-fits-all solution? If you're buying, refinancing, or renewing, I’d love to help you explore your options, explain the fine print, and find a mortgage that truly works for you. Let’s start with a conversation—no pressure, just good advice.

Buying a Vacation Property or Rental? Here’s What Lenders Look For

By Chad Oyhenart • October 1, 2026
Owning a vacation home or an investment rental property is a dream for many Canadians. Whether it’s a cottage on the lake for family getaways or a rental unit to generate extra income, real estate can be both a lifestyle choice and a smart financial move. But before you dive in, it’s important to know what lenders look for when financing these types of properties. 1. Down Payment Requirements The biggest difference between buying a primary residence and a vacation or rental property is the down payment. Vacation property (owner-occupied, seasonal, or secondary home): Typically requires at least 5–10% down, depending on the lender and whether the property is winterized and accessible year-round. Rental property: Usually requires a minimum of 20% down. This is because rental income can fluctuate, and lenders want extra security before approving financing. 2. Property Type & Location Not all properties qualify for traditional mortgage financing. Lenders consider: Accessibility : Is the property accessible year-round (roads maintained, utilities available)? Condition : Seasonal or non-winterized cottages may not meet standard lending criteria. Zoning & Use : If it’s a rental, lenders want to ensure it complies with municipal bylaws and zoning regulations. Properties that fall outside these norms may require financing through alternative lenders, often with higher rates but more flexibility. 3. Rental Income Considerations If you’re buying a property with the intent to rent it out, lenders may factor the rental income into your mortgage application. Long-term rentals : Lenders typically accept 50–80% of the expected rental income when calculating your debt-service ratios. Short-term rentals (Airbnb, VRBO, etc.) : Many traditional lenders are cautious about using projected income from short-term rentals. Alternative lenders may be more flexible, depending on the property’s location and your financial profile. 4. Debt-Service Ratios Lenders use your Gross Debt Service (GDS) and Total Debt Service (TDS) ratios to determine if you can handle the mortgage payments alongside your other obligations. With investment or vacation properties, lenders may apply stricter guidelines, especially if your primary residence already carries a large mortgage. 5. Credit & Financial Stability Your credit score, employment history, and overall financial health still matter. Since vacation and rental properties are considered higher risk, lenders want reassurance that you can handle the additional debt—even if rental income fluctuates or the property sits vacant. 6. Insurance Requirements Rental properties often require specialized landlord insurance, and vacation homes may need coverage tailored to seasonal or secondary use. Lenders will want proof of adequate insurance before releasing mortgage funds. The Bottom Line Buying a vacation property or rental can be exciting, but financing these purchases comes with extra rules and considerations. From higher down payments to stricter property requirements, lenders want to be confident that you can handle the responsibility. If you’re considering a second property, the best step is to work with a mortgage professional who can compare lender requirements, outline your options, and find the financing that works best for you. Thinking about making your dream of a vacation or rental property a reality? Connect with us today.