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

Tanya Toye • 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.

Tanya Toye

Mortgage Broker

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Down Payment Options for Canadian Homebuyers

By Tanya Toye • August 26, 2026
For most Canadians, the down payment is the biggest hurdle to homeownership. A down payment is the initial amount you contribute toward your property purchase, while the lender covers the rest through a mortgage. By law, Canadian lenders can only finance up to 95% of a property’s value, which means you’ll need at least 5% down to qualify. If you’re putting down less than 20%, your mortgage must be insured through one of Canada’s three default insurance providers— CMHC, Sagen (formerly Genworth), or Canada Guaranty . This insurance comes at a cost, but it can be rolled into your mortgage amount. The less you put down, the higher the premium. Since saving a down payment can feel overwhelming, it helps to know the different sources you can draw from. Here are the most common options available to Canadian homebuyers: 1. Savings & Personal Resources The most straightforward source is your own savings. Lenders will ask to see a 90-day history of the funds in your account. Any large deposits outside of regular payroll must be explained with documentation—such as the sale of a vehicle or a transfer from an investment account. This requirement isn’t just red tape; it’s part of Canada’s anti-money laundering rules. 2. Proceeds from the Sale of a Property If you’ve recently sold another home, you can use the proceeds as a down payment on your new purchase. Proof of the sale—such as the final statement of adjustments from your lawyer—will be required. 3. RRSP Home Buyers’ Plan (HBP) First-time buyers can withdraw up to $35,000 each (or $70,000 as a couple) from their RRSPs to put toward a down payment under the federal Home Buyers’ Plan . The funds are withdrawn tax-free, but they must be repaid over a 15-year period. This is a popular option for buyers who have been steadily contributing to their retirement savings. 4. Gifted Down Payment With today’s housing prices, many buyers turn to family for help. A parent or immediate family member can provide a gift that makes up part—or even all—of the required down payment. The lender will require a signed gift letter confirming that the money is a true gift (with no repayment expected) and proof that the funds have been deposited into your account. 5. Borrowed Down Payment In some cases, you may be able to borrow your down payment. This option is usually available only if you have strong credit and sufficient income. The payments on the borrowed funds are factored into your debt service ratios, so affordability is key. Lenders typically use 3% of the outstanding balance when calculating the additional payment. The Bottom Line A down payment doesn’t have to come from just one source—it can be a combination of savings, gifted funds, RRSPs, or other resources. What matters most is being able to show where the money came from and that it meets lender requirements. If you’d like to explore your options or learn how much you might qualify for, it’s never too early to start the conversation. Connect with us today—we’d be happy to help you create a plan and take the first steps toward homeownership.

How Property Type and Condition Influence Mortgage Financing

By Tanya Toye • August 19, 2026
Why the Property Matters When You’re Qualifying for a Mortgage When qualifying for a mortgage, lenders typically look at four core areas: Income Credit Down payment or equity The property itself Most buyers focus heavily on income, credit, and savings—and for good reason. But even if those boxes are checked, the property can still determine whether a mortgage is approved. Why Lenders Care About the Property From a lender’s perspective, the property is the collateral for the mortgage. In the unlikely event of default, they need to know the home can be sold quickly and at fair market value to recover their funds. Because of this, lenders are careful about the condition, value, and marketability of any property they finance. Homes that are in poor repair, unconventional, or overpriced can raise red flags—even when the borrower is well qualified. Appraisals Are Always Part of the Process Every mortgage requires an appraisal to confirm value. Insured mortgages (through CMHC, Sagen, or Canada Guaranty) often use an automated valuation model completed online. Conventional mortgages typically require a full, on-site appraisal by a certified appraiser. This appraisal is not optional and happens after an offer is accepted—not at the pre-approval stage. Why Pre-Approvals Aren’t a Guarantee A pre-approval is a great first step, but it only assesses you, not the property. Once you’ve made an offer, the lender must approve the specific home you’re buying. Understanding this upfront helps avoid surprises and confusion later in the process. The Risk of Buying Without a Financing Condition In competitive markets, buyers sometimes remove financing conditions to strengthen their offer. However, this comes with risk. If the appraisal comes back low—or the lender is concerned about the property’s condition—you could be denied financing after the offer is firm. In that scenario, your deposit may be at risk. Buying a Home That Needs Work If you’re considering a property that isn’t in perfect condition, there are solutions. A purchase plus improvements program allows you to buy a home and include renovation costs in your mortgage. The process is structured and requires planning, but it can be an excellent way to turn a fixer-upper into a great long-term investment. Final Thoughts Mortgage approval isn’t based solely on your finances—the property matters just as much. Knowing this ahead of time helps you make smarter offers, reduce risk, and plan more effectively. If you’re buying a property that needs work or want clarity on how a lender may view a specific home, feel free to reach out. I’d be happy to walk you through your options and help you plan with confidence.