Where Canadian mortgage rates stand heading into September 2026
A Bank of Canada decision does not set your mortgage rate directly. Fixed rates are priced off Government of Canada bond yields plus a lender spread; variable rates move with prime, which tracks the policy rate. So the levels below already reflect what markets expect the Bank to do — the September 2 announcement is a confirmation or a surprise on top of that. The table summarizes lowest-in-market advertised rates reported by public Canadian comparison sites in August 2026.
| Term | Lowest advertised (Aug 2026) | What it tells you |
|---|---|---|
| 1-year fixed | ~4.29% | Shortest fixed; priced above longer terms in the inverted curve |
| 2-year fixed | ~3.94% | Bridge to an expected different-rate window |
| 3-year fixed | ~3.91%–3.94% | Common compromise term in 2026 |
| 5-year fixed | ~4.00%–4.09% | Longest mainstream payment certainty |
| 5-year variable | ~3.35%–3.40% | Lowest starting rate; moves with prime (4.45%) |
Figures are rounded public benchmarks as of August 2026 and change frequently. Lowest advertised rates typically assume an insured, high-ratio, owner-occupied purchase with strong credit and verified income — many files do not qualify, and lender averages run higher than the lowest quoted. See current Canadian mortgage rates, the 5-year fixed and 5-year variable pages for updated pricing.
What the Bank of Canada decides on September 2 — and why markets have already moved
The Bank of Canada sets the target for the overnight rate, which influences prime and therefore variable mortgage rates. Its next fixed announcement date is September 2, 2026, after holding at 2.25% on July 15, 2026. The reason your fixed quote barely flinches on decision day is that five-year fixed pricing is anchored to the five-year GoC bond yield, which already bakes in the market's expectation for the whole rate path.
In August 2026 the market treated 2.25% as a practical floor. CORRA (Canadian overnight repo) forward pricing pointed to the policy rate grinding higher rather than lower, because of sticky inflation and global cost pressures. That is why the lowest 1-year fixed (~4.29%) still sits above the lowest 5-year fixed (~4.0%): the front of the curve expects dearer money in 12 months. A September hold would keep that story intact; a hike would pull it forward; a cut would unwind it.
Market-implied probabilities are not forecasts and frequently prove wrong. The Bank's own communications and the subsequent inflation and employment data drive the actual path.
Fixed vs variable outlook into 2027
WOWA's market-implied outlook (updated August 21, 2026) projects both fixed and variable drifting up if the policy rate rises as priced. The table below shows the lowest advertised rate now versus the end-of-2026 projection.
| Product | Now (Aug 2026) | Projected end of 2026 |
|---|---|---|
| Lowest 5-year fixed | ~4.02% | ~4.32% |
| Lowest 5-year variable | ~3.40% | ~3.65% |
| Prime rate | 4.45% | rises with policy rate (WOWA ~5.20% by mid-2027) |
The gap between variable and fixed is expected to narrow as the policy rate climbs — variable starts cheaper today but is forecast to catch up toward today's fixed level. That is the central fixed-vs-variable trade-off for anyone choosing a term in late 2026. The honest framing: variable wins on cost if the Bank holds or cuts; fixed wins on certainty if the Bank hikes. Neither is a forecast. See the fixed vs variable Canada guide for the fuller comparison.
Three scenarios: hold, hike or cut
No one knows the September 2 outcome in advance. Here is how each branch would typically land for a borrower:
Hold (market base case in August 2026)
- Variable: prime stays at 4.45%, so your payment does not move.
- Fixed: no direct change, but bond yields can still drift — WOWA projects the lowest 5-year fixed easing slightly toward ~4.32% by year-end on its base path.
Hike (if inflation re-accelerates)
- Variable: prime rises, so your payment rises, usually within a billing cycle.
- Fixed: tends to rise via higher bond yields; a 1-year fixed would reprice higher at renewal.
Cut (if the economy weakens sharply)
- Variable: prime falls, so your payment falls.
- Fixed: can ease as bond yields drop, helping anyone shopping or renewing.
A fixed mortgage payment never changes mid-term from a Bank of Canada move — only at renewal or refinance. The scenario that actually hurts is being on a variable when the Bank hikes, or locking a long fixed right before a cut. Price your own worst case in the mortgage payment calculator.
See what lenders would actually quote you
Headline forecasts are useful context, but your real rate depends on your balance, property, insurance status and timeline. RateShop puts current purchase, switch, renewal and refinance options side by side — so you can compare fixed and variable quotes across terms instead of guessing which way the Bank will go on September 2.
Compare mortgage ratesIf you are renewing before year-end
Most 2026 renewal volume is weighing a short vs long term against this same forecast. Two practical points:
- Start early. Begin comparing four to six months before maturity — most lenders hold a rate for 90 to 120 days — and check what happens if you do nothing, since an automatic renewal into a posted rate is usually the most expensive outcome available.
- Model the rate path, not just today's rate. If the market is right and the policy rate rises, a variable renewal started now at ~3.4% could be higher at reset, while a 5-year fixed near ~4.0% locks the cost. Run your real balance, rate and amortization through the mortgage payment calculator and pick the structure whose worst case you can carry. Full process and current pricing are on the mortgage renewal rates page.
Rate disclaimer
All rates, yields and market figures on this page are general educational information gathered from public sources on or about August 22, 2026 and may be out of date, incomplete or superseded without notice. RateShop does not guarantee any rate, approval or product availability. Actual mortgage rates depend on lender criteria, credit profile, verified income, property type and value, mortgage purpose, down payment or equity, insurance status, amortization and documentation. Market-implied rate probabilities, economist forecasts and CORRA forward pricing are not forecasts and frequently prove wrong. This page does not provide personalized mortgage, legal, tax or financial advice. Speak with a licensed mortgage professional about your own situation.
Frequently asked questions
When is the Bank of Canada's next rate decision in 2026?
The Bank of Canada's next fixed announcement date is September 2, 2026. The Bank held its target for the overnight rate at 2.25% on July 15, 2026, and prime at the major banks has been 4.45% since October 2025. Market-implied odds in August 2026 favoured another hold in September, but expectations can shift with each inflation and jobs report. Market expectations are not guarantees.
What are Canadian mortgage rates right now (August 2026)?
Public comparison tables in mid-to-late August 2026 showed the lowest advertised 5-year fixed around 4.0% to 4.09% (Ratehub high-ratio 4.09%; WOWA about 4.02%), the lowest 5-year variable around 3.35% to 3.40%, prime at 4.45%, the lowest 3-year fixed around 3.91% to 3.94%, and the lowest 1-year fixed around 4.29%. These are advertised benchmarks, not offers, and your own quote depends on your file, insurance status, amortization and lender.
Will mortgage rates go up or down after the September 2026 Bank of Canada decision?
A Bank of Canada decision moves variable rates through prime and only indirectly affects fixed rates, which are priced off Government of Canada bond yields. Market-implied (CORRA forward) pricing pointed in August 2026 to the policy rate grinding higher from its 2.25% floor. WOWA's forecast (updated August 21, 2026) projected the lowest 5-year fixed at about 4.32% by the end of 2026 and the lowest 5-year variable at about 3.65%. Big-bank forecasts are split: RBC sees 3.25% by end-2027, Scotiabank 3% by end-2026, while TD and BMO hold at 2.25% for longer. These are probabilities and economist views, not guarantees.
How does a Bank of Canada hold, hike or cut affect my mortgage payment?
If you have a variable mortgage, a change in the policy rate changes prime, which changes your payment (or the portion going to interest) usually within a billing cycle. A fixed mortgage payment does not change until you renew or refinance, regardless of what the Bank does. A hold keeps prime at 4.45%; a hike pushes variable payments up and tends to lift fixed pricing via bonds; a cut lowers variable payments and can ease fixed pricing. Run your balance and rate through the mortgage payment calculator to see the dollar impact.
Should I lock in my mortgage rate before September 2, 2026?
This page cannot tell you what to do for your file. General points: lenders typically hold a rate for 90 to 120 days, so locking in ahead of a decision removes some near-term repricing risk but may cost you if rates fall. A longer fixed term (around 4.0%) protects payment certainty; a variable (around 3.4%) starts lower but can rise if the Bank hikes. Compare both through the calculator and speak with a licensed mortgage professional. See our fixed vs variable Canada guide for the fuller trade-off.
What is the mortgage rate forecast for 2027?
Market-implied CORRA forward pricing in August 2026 pointed to a gradual rise in the policy rate from 2.25%, with WOWA's outlook showing variable and fixed rates drifting up through 2027 and plateauing alongside the policy rate later in the decade. Economist views vary: RBC expects 3.25% by the end of 2027, Scotiabank 3% by the end of 2026, while TD and BMO keep the policy rate at 2.25% for longer. None of these are commitments, and actual rates depend on inflation, growth and lender pricing.
Sources used
- Bank of Canada: Policy interest rate (2.25% held July 15, 2026; 2026 fixed announcement schedule, next decision September 2, 2026)
- WOWA.ca: Canada Mortgage Interest Rate Forecast 2026–2031 (updated August 21, 2026; CORRA forward / market-implied outlook and big-bank forecasts)
- WOWA.ca: Canada mortgage rates (current advertised snapshot, August 2026)
- Ratehub.ca: Best mortgage rates in Canada (5-year fixed 4.09%, 5-year variable 3.35%, August 2026)