This morning, as anticipated, the Bank of Canada announced their decision to hold the policy rate for the fifth time this year This means the Prime Rate should remain at 4.45%.

As indicated in our previous announcements, the Prime Rate directly impacts those who hold variable or adjustable rate mortgages, as well as those with secured or unsecured lines of credit. These rate announcements do not have a direct correlation to fixed rate mortgages, as fixed rates are priced against the bond market. If you're unsure whether you're impacted by this announcement, please reach out or book a time to chat HERE.

Highlighted in both the Bank of Canada's announcement and their accompanying Monetary Policy Report (MPR) is that, while there is still significant uncertainty surrounding US trade policy and ongoing volatility in the Middle East conflict, Canada's economy is showing signs of improvement:

Recovering Growth

After restrained growth in Q1, growth is anticipated to be 2.5% in the second quarter, averaging just above 1% for the first half of the year. Growth is expected to average around 1.5% for the second half of 2026, increasing to 1.8% in 2027 & 2028. In their MPR, the Bank of Canada notes that 'although the Canada‑United States‑Mexico Agreement is now subject to annual review and uncertainty remains, businesses are adjusting to the new trade environment.'

Inflation

CPI inflation rose to 3.2% in May, primarily due to increased gasoline prices. Inflation excluding gasoline has remained stable near 2%. CPI inflation is expected to return to 2.5% throughout the second half of the year, with downward pressures from shelter costs and goods & services offsetting increased food price inflation. That said, while oil prices are down from their peak in April, inflation projections will be highly dependent on how the situation in the Middle East continues to unfold.

What Does This Mean?

Today's announcement provides a little more stability in an otherwise uncertain environment. If you're house hunting, steady rates and relatively stable home prices can make it easier to plan with confidence. If your mortgage is coming up for renewal, this is a great opportunity to review your options rather than simply accepting your lender's first offer. And if you're considering refinancing to consolidate debt, fund renovations, or access equity, borrowing costs haven't necessarily increased since the last announcement, so now may be a good time to explore what's possible. As we always say, every situation is different. While the headlines may indicate what's happening in the broader economy, the right mortgage strategy still comes down to your goals, timeline, and financial picture. If you're wondering how today's announcement affects you, we're always happy to chat through your options.

We understand there may still be many questions and concerns amongst our clients and partners. As part of our commitment to providing the most up to date information and comprehensive support, we provide our very own Canadian Mortgage App. Interested in potentially refinancing to make your monthly payments more comfortable? Click HERE to download the app and run various scenarios to see what the best fit may be. 

FULL BANK OF CANADA RATE ANNOUNCEMENT

FULL MONETARY POLICY REPORT

Information note

As always, we are here to help. If you'd like to chat about your scenario and see what options may be available for you, let us know! We will keep you updated as we receive more information about today's announcement. The next announcement is scheduled to take place on September 2, 2026.