Market update · Placeholder
Bank of Canada: what this decision means for you
Replaced on each decision date
Reading a Bank of Canada decision
On each of its scheduled announcement dates the Bank of Canada says whether it is holding, raising or lowering its policy rate. The decision itself is one line. What it means for you depends on which kind of mortgage you have, and that is what these updates explain.
The policy rate
The policy rate is what the Bank charges on overnight loans between banks. It is not a mortgage rate. It is the base the banks build their prime rate on, so when it moves, prime usually follows within a day or two.
What moves variable rates
A variable mortgage is priced as prime plus or minus a margin. When prime moves, your rate moves with it. On some variable mortgages the payment stays the same and more or less of it goes to interest; on others the payment itself changes. Either way, the decision reaches you almost at once.
What moves fixed rates
Fixed rates follow the bond market, not the policy rate. Lenders price a fixed term off the yield on Government of Canada bonds, which moves every day on what investors expect inflation and rates to do next. A decision is often priced in before it is announced, so fixed rates can barely move on the day.
What a decision does not tell you
It does not tell you what your renewal rate will be, whether to choose fixed or variable, or what happens next. Those depend on your mortgage, your lender and the term you choose. Read the update, then book the 20-minute call for the part that is specific to you.
Nothing on this page is a rate, a forecast or advice about your mortgage. It explains how a decision works so you can read the next one yourself.
This week's update
What every update contains
The same shape every time, so you can go straight to your part.
The shape of an update
- The decision: held, raised or lowered, in one line.
- What changed: prime, variable and fixed, in plain words.
- If you are buying: what it does to a pre-approval and a rate hold.
- If you are renewing: how to read it against the offer in your letter.
- If you are building: what it does to the interest reserve and the draws.
Archive
Past decisions, kept in one place
Nothing is deleted, so a year of decisions reads in a few minutes.
| Month | Decision | What changed for you |
|---|---|---|
| Placeholder month | Placeholder: held, raised or lowered, in one line | Placeholder: the paragraph for buyers, renewers and builders |
| Placeholder month | Placeholder: held, raised or lowered, in one line | Placeholder: the paragraph for buyers, renewers and builders |
| Placeholder month | Placeholder: held, raised or lowered, in one line | Placeholder: the paragraph for buyers, renewers and builders |
One email on decision day
Subscribe and the update lands in your inbox on each decision date, with the part for your stage first. No rate sheets, no forecasts and nothing between decisions.
Stop it any time; the link is at the bottom of every email, and your address is used for this and nothing else.