A rate hold means the Bank of Canada leaves the overnight rate at 2.25%, so prime stays near 4.45%. A rate cut lowers the overnight rate and pulls prime down with it. Track the live number on our rate tracker and watch the next decision on July 15, 2026.
A hold keeps the overnight rate at 2.25% and prime near 4.45%, so variable payments stay put. A cut lowers the overnight rate, prime falls below 4.45%, and variable borrowers pay less or repay principal faster. Fixed rates track bond yields, not the overnight rate, and stay locked during your term. This is not financial advice.
When the Bank of Canada holds, it announces no change to the overnight rate — currently 2.25%. Nothing moves mechanically: prime stays around 4.45%, so a variable-rate mortgage keeps the same rate and payment, and a fixed borrower is unaffected mid-term. A hold is often a signal that the Bank is waiting for more data on inflation and the economy before it acts. The tone of the accompanying statement matters as much as the decision itself, because it hints at whether the next move is more likely a cut or another hold.
A cut lowers the overnight rate, and Canada's big lenders usually pass the change to prime within a day or two. If prime drops from 4.45%, a variable mortgage priced at "prime minus a margin" reprices lower. Depending on your contract, that either reduces your payment directly or keeps the payment steady while more of it repays principal. See exactly how this flows through in what happens to my mortgage when rates drop. Fixed borrowers see no change during their term, but new fixed quotes may ease if bond yields fall alongside expectations of further cuts.
| Effect | Hold (rate stays 2.25%) | Cut (rate falls) |
|---|---|---|
| Prime rate | Stays ~4.45% | Falls below 4.45% |
| Variable payment | Unchanged | Lower or more to principal |
| Fixed payment (in term) | Unchanged | Unchanged |
| New fixed quotes | Depends on bond yields | May ease with yields |
The next scheduled decision is July 15, 2026. The Bank announces on fixed dates about eight times a year and publishes its reasoning. To read the signals, watch the inflation rate, the jobs numbers and the Bank's own language: cooling inflation and a softening economy tilt toward a cut, while sticky inflation supports a hold. Our rate history shows how the overnight rate reached 2.25%, which helps put each new decision in context. No forecast is certain, so treat market odds as probabilities, not promises.
A hold means the Bank leaves the overnight rate unchanged — at 2.25% in 2026. Prime stays near 4.45%, so variable mortgage rates and payments do not move, and there is no automatic change for fixed borrowers during their term.
A cut lowers the overnight rate, and lenders typically pass it to prime within days. Prime would fall below 4.45%, so a variable-rate mortgage either sees a lower payment or more of each payment going to principal. Fixed rates do not change during your term but new fixed quotes may drift with bond yields.
Not directly. Fixed rates are priced off government bond yields, not the overnight rate. A hold can still influence bond markets through the Bank's tone, but your existing fixed payment is locked for the term regardless.
The next scheduled decision is July 15, 2026. The Bank announces on fixed dates roughly eight times a year and publishes its reasoning, which markets read for signals about future holds or cuts.
Watch inflation, jobs data and the Bank's own language. Cooling inflation and a weaker economy make a cut more likely; firm inflation supports a hold. No one can predict decisions with certainty, so treat market forecasts as probabilities, not promises.