Bank of Canada Holds Rate at 2.25% — July 15, 2026

Erik Sepper • July 15, 2026

The Bank of Canada announced today that it is holding its target for the overnight rate at 2.25%, with the Bank Rate at 2.5% and the deposit rate at 2.20%. The tone of today's announcement is notably more optimistic than previous months. Here's what's changed and what it means for you.

What the Bank of Canada Said

Signs of Improvement

For the first time in several months, the Bank is signalling that Canada's economy is showing real signs of improvement. Growth is picking up, and inflation is projected to ease gradually from its recent spike. While risks remain, particularly around the Middle East conflict and U.S. trade policy, the overall tone has shifted toward cautious optimism.

The Global Picture

Since the April Monetary Policy Report, global economic prospects have been dampened by higher oil prices from the Middle East conflict. However, the build-out of artificial intelligence is now supporting economic activity in a growing number of countries. Oil prices are still below their April peak, though the situation in the Middle East remains volatile.

The U.S. economy is growing at about 2.5%, driven by strong consumer spending and booming AI investment. China continues to expand on the back of robust exports. Europe has been weighed down by high energy prices but is expected to strengthen in the second half of the year if prices ease as anticipated. The Bank projects global GDP growth will slow to 2.75% in 2026 before recovering to around 3.25% in 2027 and 2028.

The Canadian Economy

Canada's GDP data over the past year has been choppy. Growth stalled as the economy adjusted to new tariffs, high uncertainty, and slower population growth. But there are now clear signs that growth has resumed in the second quarter, estimated at 2.5%. The Bank acknowledges this largely reflects the unwinding of temporary factors, but sources of growth appear to be broadening.

Consumer spending looks solid. Housing activity has been weak but is showing signs of stabilizing. Export growth has resumed and is expected to strengthen. Business investment is projected to pick up modestly, boosted in the near term by the oil and gas sector. More businesses also report they are finding ways to navigate through trade uncertainty.

Following GDP growth of 0.7% in 2026, the Bank projects growth of 1.8% in both 2027 and 2028. The unemployment rate was 6.5% in June, continuing to hover in the 6.5% to 7% range it has maintained since late 2024.

Inflation

CPI inflation rose to 3.2% in May, mainly due to higher gasoline prices linked to the Middle East conflict. Excluding gasoline, inflation was just 2.2%, and core inflation measures remained close to 2%. That is an important distinction: the inflation we are seeing is largely an energy story, not a broad cost-of-living surge.

Near-term inflation expectations remain sensitive to gasoline prices, but longer-term expectations are well anchored. The Bank expects CPI inflation to stay elevated in June before easing gradually in the coming months, returning to around 2% in early 2027. Inflation is then forecast to average around 2% in 2027 and 2028.

Why the Bank Held

Governing Council judged that the current rate of 2.25% remains appropriate to sustain the economic recovery and bring inflation back to target. Uncertainty is still high, and the Bank remains prepared to adjust monetary policy as needed. The commitment to price stability remains firm through this period of global upheaval.

What This Means for Mortgage Holders and Buyers

A rate hold means no immediate change to variable-rate mortgage payments or home equity lines of credit (HELOCs) tied to the prime rate. The prime rate remains at 4.45%.

Today's announcement carries a more positive signal than we have seen in recent months. The economy is recovering, core inflation is near target, and the Bank's language suggests the path forward is one of gradual improvement, not further tightening. For borrowers, this is an encouraging environment to plan ahead.

If you are renewing a mortgage in the coming months, thinking about purchasing, or weighing your fixed vs. variable options, now is a good time to have that conversation. The landscape is shifting, and being prepared puts you in the best possible position.

The next scheduled rate announcement is September 9, 2026 .

As always, every borrower's situation is unique. If you have questions about how today's decision affects your mortgage, reach out. We would love to help you navigate your options.

Information sourced from the Bank of Canada's official press release dated July 15, 2026.

ERIK SEPPER 
MORTGAGE AGENT

CONTACT ME

What Older Canadians Should Know About Mortgage Financing

By Erik Sepper • July 8, 2026
Retirement doesn’t always mean a mortgage-free life anymore. And that’s okay. Between higher home prices, rising living costs, and longer life expectancy, many Canadians are choosing to retire with a mortgage or refinance later in life to create more flexibility. The goal isn’t perfection. It’s having options that actually support the life you want to live. If you’re thinking about how a mortgage fits into your retirement years, you’re not alone—and you’re not out of options. Why work with an independent mortgage professional? Because retirement financing is not one-size-fits-all. Unlike a single bank, an independent mortgage professional can look across multiple lenders and solutions to find what truly fits your income, equity, and long-term plans—not just what one institution offers. Mortgage options available in retirement Traditional Mortgage Solutions Many retirees still qualify for standard mortgages. Pension income, investment income, and other retirement sources can often be used to support an application. If you have good equity and solid credit, this is often the lowest-cost option. Reverse Mortgages For homeowners 55+, a reverse mortgage can unlock tax-free equity from your home with no monthly payments required. There’s no income verification or medical questions, making it a helpful option for those who want to improve cash flow while staying in their home. Home Equity Line of Credit (HELOC) A HELOC allows you to access your home equity as needed and only pay interest on what you use. Many retirees appreciate the flexibility and like consolidating income and expenses in one place. Private Financing Sometimes life throws a curveball. If timing, income, or credit create challenges, private financing can act as a short-term bridge. It’s not usually the first choice, but it can provide solutions when traditional lenders can’t. If you’re approaching retirement—or already there—and wondering how your mortgage fits into the picture, let’s talk. A clear plan can make retirement feel a lot more secure and a lot less stressful.

Why a Mortgage Pre-Approval Protects Both Your Head and Your Heart

By Erik Sepper • July 1, 2026
Why a Mortgage Pre-Approval Protects Both Your Head and Your Heart There’s no denying it—buying a home is an emotional journey. In a competitive market, it can feel like you need to stretch beyond your comfort zone or bid above asking just to have a chance. That pressure can make it hard to separate what you want from what you can realistically afford. One of the biggest pitfalls buyers face is falling in love with a home that’s outside their price range. Once that happens, every other property seems like a compromise—even the ones that might have been a perfect fit otherwise. The best way to avoid this heartache? Get pre-approved before you start shopping. What a Pre-Approval Does for You A mortgage pre-approval gives you more than just a number—it provides clarity, confidence, and protection: Know your buying power : Shop within your true price range and avoid disappointment. Spot potential roadblocks : Uncover issues like credit bureau errors before you make an offer. Get organized : Learn exactly what documentation you’ll need so there are no surprises. Lock in a rate : Many lenders hold your rate for 30–120 days, giving you peace of mind if rates rise. Save yourself heartache : Protect yourself from falling for a home you can’t afford. Head vs. Heart Buying a home is about balance. Your head tells you what’s financially sound, your heart tells you what feels right—and both matter. A pre-approval helps bring those two sides together, so you can make confident choices without emotional stress clouding your judgment. The Bottom Line Looking at properties for fun is one thing—but if you’re serious about buying, a pre-approval is the smartest first step you can take. It sets realistic expectations, saves time, and protects your emotions along the way. If you’d like to explore your options and get pre-approved, I’d be happy to walk through the process with you. Let’s make sure you’re ready to shop with confidence.

Tips to Pay Off Your Mortgage Early

By Erik Sepper • June 24, 2026
Owning a home feels great—carrying a large mortgage, not so much. The good news? With the right strategies, you can shorten your amortization, save thousands in interest, and become mortgage-free sooner than you think. Here are four proven ways to make it happen: 1. Switch to Accelerated Payments One of the simplest ways to reduce your mortgage faster is by moving from monthly payments to accelerated bi-weekly payments . Instead of 12 monthly payments a year, you’ll make 26 half-payments. That works out to the equivalent of one extra monthly payment each year, shaving years off your mortgage—often without you noticing much difference in your budget. 2. Increase Your Regular Payments Most mortgages allow you to boost your regular payment by 10–25%. Some even let you double up payments occasionally. Every extra dollar goes directly toward your principal, which means less interest and faster progress toward paying off your balance. 3. Make Lump-Sum Payments Depending on your lender, you may be able to make lump-sum payments of 10–25% of your original mortgage balance each year. This option is ideal if you receive a bonus, inheritance, or other windfall. Applying a lump sum directly to your principal immediately reduces the interest charged for the rest of your term. 4. Review Your Mortgage Annually It’s easy to put your mortgage on auto-pilot, but a yearly review keeps you in control. By sitting down with an independent mortgage professional, you can check if refinancing, restructuring, or adjusting terms could save you money. A quick annual review helps ensure your mortgage is always working for you—not against you. The Bottom Line Paying off your mortgage early doesn’t require a massive lifestyle change—it’s about making smart, consistent choices. Whether it’s accelerated payments, lump sums, or regular reviews, every step you take helps reduce your debt faster. If you’d like to explore strategies tailored to your situation—or want a free annual mortgage review—let’s connect. I’d be happy to help you find the fastest path to mortgage freedom.