This morning, the Bank of Canada made their fourth announcement of 2026. Their decision to hold the policy rate was well inline with market expectations. 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.

This announcement, while widely anticipated, does carry with it a continued tone of uncertainty. The conflict in the Middle East has now entered its fourth month; resulting in consistent increases to energy prices, routine disruptions to global supply chains/international trade, and has subsequently put upward pressure on inflation. While still considered early days, the Governing Council has reiterated their commitment to analyze the war's 'near term impact on headline inflation'. They are not willing to let higher energy prices to become persistent inflation. The Bank of Canada also noted the continued proposal of new tariffs and trade policy from the United States to be a source of elevated uncertainty. 

Statistically, there were some notable updates:

• In April, CPI inflation rose to 2.8%. The increase reflects increased energy prices (both higher oil prices and the elimination of the consumer carbon tax falling out of the 12 month rate of inflation)

• Limited evidence of higher energy prices being passed on to consumer prices

• Food price inflation is still high (remains moderated at the time)

• Global oil prices are still elevated - roughly $10/barrel higher than the Monetary Policy Report assumed they would be

• Total inflation expected to hover ~3% in the near future before starting a gradual decrease towards 2%

• May unemployment reading was 6.6%
  

The global economy is still facing many pressures that are clouded in uncertainty. Hearing this on a nearly daily basis can be draining and disheartening - especially when the evidence is right in front of us at the gas station and the grocery store. Locally, when it comes to the housing market, house prices and interest rates have managed to remain relatively steady. Houses are selling, buyers are entering the market (some for the first time) and folks are feeling comfortable in their options and decisions upon renewal. 

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

 

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 and Monetary Policy Report is scheduled to take place on July 15th, 2026.