Bank of Canada Rate Decision January 2026: What It Means for Your Mortgage
The Bank of Canada announced its latest interest rate decision today, and in a move that surprised absolutely no one, it held the policy rate steady.
No rate hike.
No rate cut.
Just a continued wait-and-see approach.
Here is what the announcement actually means for homeowners, borrowers, and anyone with a mortgage in Canada.
The Bank of Canada Held Rates Steady
As of today, the Bank of Canada’s policy interest rate remains at 2.25%.
It is important to understand that this is not the rate consumers receive from banks. Instead, it is the benchmark rate that influences lending across the financial system.
Most major banks currently have a prime rate of 4.45%, which is what variable-rate mortgages and lines of credit are based on, with either a discount or a premium applied.
What This Rate Decision Affects and What It Does Not
This is where confusion often starts, so let’s be very clear.
Bank of Canada rate decisions only affect variable-rate products, including:
Variable-rate mortgages
Home equity lines of credit
Any loan tied directly to prime
Fixed mortgage rates are not set by the Bank of Canada.
Fixed rates are driven by bond yields, which react to:
Inflation expectations
Economic data
Investor confidence
Today’s announcement did not directly change fixed mortgage rates.
If you currently have a fixed-rate mortgage, this decision did not affect your rate.
Why the Bank of Canada Chose to Hold Rates
According to the Bank’s commentary, several factors influenced today’s decision:
Inflation is close to target, though not fully settled
Economic growth is moderate
Global uncertainty remains elevated
In plain language, the message was simple:
Conditions are stable enough to pause, but not stable enough to declare victory.
What This Means for Homeowners
For homeowners and borrowers, today’s announcement signals continued stability rather than urgency.
If you have a variable-rate mortgage, your rate remains unchanged for now.
If you are renewing your mortgage in 2026, this pause provides time to plan rather than rush into decisions based on fear-driven headlines.
If you are considering switching lenders or restructuring your mortgage, the focus should be less on short-term rate moves and more on whether your mortgage structure still aligns with your financial goals.
The Bigger Question Is Not the Rate
The most important takeaway from today’s announcement is this:
The real question is not what the Bank of Canada does next.
It is whether your mortgage is structured in a way that still makes sense for your life, your cash flow, and your long-term plans.
Rate decisions come and go. Mortgage structures last for years.
Looking Ahead
The next Bank of Canada rate decision is scheduled for March 18, 2026. As always, markets will speculate, headlines will escalate, and homeowners will be left wondering what to do.
The best time to review your mortgage is before pressure forces your hand.
If you are approaching renewal, holding a variable rate, or simply unsure whether your current setup is still the smartest option, reviewing your strategy early can make a meaningful difference.