On July 15, 2026, the Bank of Canada held its policy interest rate at 2.25% — the sixth consecutive decision without a change. Most bank prime rates stay at 4.45%. The more notable news wasn't the hold itself, which markets had already priced in, but the Bank's downgraded growth forecast: it now expects the Canadian economy to grow roughly 0.7% in 2026, down from the 1.2% it forecast previously.
The short version: policy rate stays at 2.25%, prime rate stays at 4.45%. The Bank cut its 2026 growth forecast to about 0.7% (from 1.2%), citing oil price volatility and US trade turmoil. Consensus forecasts see the rate holding through the rest of 2026, with the next move — a hike — not expected until Q2 2027. The next scheduled decision is September 2, 2026.
Why hold instead of cut further, if growth is slowing?
A slowing economy would normally argue for more rate cuts to stimulate activity. The Bank isn't doing that here because inflation hasn't fully settled at its 2% target, and cutting further risks reigniting it — particularly with oil prices volatile and US trade tensions creating additional uncertainty. The Bank's language framed the hold as "appropriate to sustain the economic recovery and bring inflation back to the 2% target," which is central-bank shorthand for "we'd rather not move in either direction until the picture is clearer."
What this means if you have a variable-rate mortgage
Variable mortgage rates track the prime rate, so six consecutive holds have meant six consecutive months of payment stability for variable-rate borrowers. The next scheduled decision is September 2, 2026, and consensus forecasts don't expect a change there either — most projections have the rate holding at 2.25% through the rest of 2026, with hikes not beginning until Q2 2027 (RBC, for one, projects a series of quarter-point increases starting then).
| Scenario | Rate | Monthly payment, $400,000 / 25-year amortization |
|---|---|---|
| Current variable rate (prime 4.45% − 0.50%) | 3.95% | $2,100.32 |
| If BoC hikes 25 bps | 4.20% | $2,155.77 |
That's about $55 more a month on a $400,000 mortgage for every quarter-point increase — useful context for why the market watches these "hold" decisions as closely as it watches actual cuts or hikes: a rate hold isn't neutral information, it's confirmation that your current payment schedule remains intact for at least another six weeks.
Fixed-rate mortgages: this doesn't move you at all — yet
If you have a fixed-rate mortgage, none of this changes your payment before your term renews. What it does affect is the rate environment you'll renew into. If you're renewing in the next 6–12 months, a rate environment expected to hold through 2026 before rising in 2027 is more favorable than one where hikes were imminent — worth factoring into whether you lock in a new fixed term now or wait.
What to watch next
- September 2, 2026 — the next scheduled Bank of Canada rate decision.
- Oil price stability — named explicitly as a risk factor in the Bank's own statement.
- US trade developments — the Bank flagged ongoing trade turmoil as a source of "more economic damage" risk, which could pull the timeline for eventual hikes in either direction.