Bank of Canada interest rate announcement: What to expect on September 2

The last announcement came in July, when the rate was held at 2.25%. It has remained unchanged since October 2025, when it came down from 2.50%.

MoneySense spoke to Ratehub’s VP of Mortgage, Jamie David, about what Canadians can expect in September and how they should adapt. 

What to expect from the Bank of Canada interest rate update:

“The Bank of Canada is widely expected to keep its overnight rate unchanged at the September announcement, even as the trade war with the U.S. escalates,” noted David. The Consumer Price Index (CPI) rose from 2.8% to 3% in July. With that considered, the expert believes policymakers have little reason to consider a cut.

“The Bank is currently in a bind, with escalating trade tensions threatening to slow economic growth, while inflationary pressures weigh against any easing. The Bank is likely to hold rates steady as it assesses the broader impact of the escalating trade war on both inflation and economic growth.”

What happens to fixed mortgage rates?

David told MoneySense that fixed mortgage rates could move in either direction over the coming weeks, with much depending on how the trade war unfolds.

“A prolonged conflict that weakens the economy could push bond yields, and consequently fixed mortgage rates, lower as recession concerns grow,” she said, adding that tariff-driven inflationary pressures could push yields and rates higher, simultaneously.

“That tension has been evident in recent days, with the five-year Government of Canada bond yield falling on Monday and briefly again yesterday afternoon before edging higher, underscoring how sensitive the bond market has become to developments in the trade war.”

There are currently still some discounted options available below the 4% mark, including a two-year fixed mortgage rate of 3.89% and a three-year fixed rate of 3.94%. The lowest five-year fixed mortgage rate is currently sitting at 4.09%.

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For Canadians shopping for a home or approaching a mortgage renewal, David recommends getting a rate hold amid the current market volatility. This strategic move can protect you from potential rate increases for up to 120 days, providing security while the outlook for mortgage rates remains uncertain.

What happens to variable mortgage rates?

With the Bank of Canada widely anticipated to hold its policy rate at 2.25% on Wednesday, variable mortgage rates are likely to remain unchanged in the near term. Right now, the lowest five-year variable mortgage rate is 3.35%.

However, that could change as the trade war persists, increasing the possibility of future rate cuts.

“As tariffs begin to weigh more heavily on Canadian exports, business investment, employment and overall economic growth, the Bank may need to lower rates to support the economy even with inflation running warm,” stated David.

Will the housing market recover?

The recovery of Canada’s housing market could be paused as the trade war worsens.

“Heightened economic uncertainty may prompt both buyers and sellers to take a wait-and-see approach,” shared David. “We saw a similar dynamic when tariffs were first introduced last year, with Canadian home sales falling 9.8% month-over-month in February 2025, the largest monthly decline since May 2022, as buyers pulled back from the market.”

Bank of Canada interest rate announcement dates in 2026

We are already past five Bank of Canada interest rate announcements for the year. Keep an eye on the Bank’s website. Updates always drop at 9:45 a.m. ET.

Three more updates remain on the following dates:

– September 2, 2026
– October 28, 2026
– December 9, 2026

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About MoneySense Editors

MoneySense editors and journalists work closely with leading personal finance experts in Canada. Since 1999, our award-winning magazine has helped Canadians navigate money matters.

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