Rate Update for September 2026: Bank of Canada Held Policy Interest Rate at 2.25%

Rate Update for September 2026: Bank of Canada Holds Interest Rate at 2.25%

On September 2, 2026, the Bank of Canada kept its overnight policy rate unchanged at 2.25%. 

This follows the previous rate announcements in July, June, April, March and January, which also maintained the rate at 2.25%.

The Bank's decision reflects a number of economic factors, including Canada's economic growth, inflation, employment conditions and uncertainty surrounding international trade and energy prices.

Higher energy prices, ongoing geopolitical developments and new tariffs affecting Canadian trade have created additional risks for the economy and inflation. The Bank stated that it will continue to assess economic developments and is prepared to adjust monetary policy as needed.

Future rate decisions will continue to depend on how Canada's economy and inflation develop.

For homeowners, homebuyers and borrowers approaching mortgage renewal, the announcement provides an opportunity to review what current interest rates could mean for their mortgage plans.

What Does This Mean for Mortgage Rates?

The Bank of Canada's overnight rate is an important factor influencing borrowing costs in Canada, but not all mortgage rates move in the same way or at the same time.

Variable-rate and adjustable-rate mortgages are generally more directly affected by changes in lenders' prime rates, which are influenced by the Bank of Canada's policy rate.

Fixed mortgage rates are influenced more heavily by bond yields and other market conditions. As a result, a change, or lack of change, in the Bank of Canada's overnight rate does not automatically mean that fixed mortgage rates will move by the same amount.

What About Homeowners With a Mortgage Renewal Coming Up?

If your mortgage is coming up for renewal, this can be a good time to review your options with us at Brevity Capital rather than simply accepting the renewal offer from your current lender.

A renewal gives you an opportunity to consider:

• Your current interest rate and available mortgage rates
• Your remaining mortgage balance
• Your amortization period
• Your monthly payment
• Whether your financial situation has changed
• Whether refinancing could help you access equity
• Whether consolidating higher-interest debt could make sense
• Whether another lender may offer a mortgage solution that better fits your current needs

The Bank of Canada's 2026 Financial Stability Report also notes that some borrowers renewing mortgages could experience significant payment increases, depending on the type and term of their existing mortgage.

Planning ahead can give you more time to understand your options before your renewal date.

What If You're Planning to Buy a Home?

For prospective homebuyers, the Bank of Canada's rate decision is just one part of the mortgage picture.

Your mortgage qualification can also depend on factors such as your income, credit history, existing debts, down payment, property type and overall financial situation.

Getting pre-approved can help you understand your potential purchasing range and give you a clearer picture of your mortgage options before you begin shopping for a home.

Keep in mind that a pre-approval is a planning tool and does not guarantee final mortgage approval. Your application and the property will still need to meet the applicable lender requirements.

Could Refinancing Be an Option?

If you already own a home, refinancing may be worth considering depending on your circumstances.

Homeowners may explore refinancing to access home equity, consolidate higher-interest debt, finance renovations, fund a major expense or restructure their mortgage.

However, refinancing can involve costs and qualification requirements, so it is important to review the numbers before making a decision.

Our team at Brevity Capital can help you compare the potential benefits and costs based on your individual situation.

What Happens Next?

The Bank of Canada's next scheduled interest rate announcement is October 28, 2026, when the Bank is also scheduled to release its next Monetary Policy Report.

Until then, economic conditions including inflation, employment, economic growth, energy prices and trade developments will continue to be monitored by the Bank of Canada.

Rather than trying to predict where rates will go next, borrowers can focus on understanding their current mortgage position and planning ahead.

Need Help Reviewing Your Mortgage Options?

Whether you're buying a home, renewing your mortgage, refinancing, consolidating debt or looking for financing as a self-employed borrower, understanding your options can help you make informed decisions.

At Brevity Capital, we work with a wide range of lenders, including banks and other lending institutions, to provide mortgage solutions based on different financial situations.

If you're approaching a mortgage renewal or simply want to understand your options, contact our team for a free consultation.

Call Brevity Capital at (905) 814-4455 or email [email protected] to get started.