Mortgage Rate News and Trends
5-Year Analysis: From Pandemic Lows to Neutral Stabilization
Executive Summary
Between 2021 and 2026, Canada navigated one of the most volatile interest rate environments in decades. Starting from a pandemic floor of 0.25%, the Bank of Canada aggressively hiked rates to a peak of 5.00% to combat inflation. As of mid-February 2026, the policy rate has returned to a neutral stance of 2.25%, supporting a forecasted GDP growth of 1.1%.
The Great Rate Rollercoaster (2021–2026)
This timeline illustrates the dramatic shift from the "Pandemic Floor" through the aggressive hiking cycle of 2022-2023, the plateau, and the subsequent easing phase that began in mid-2024.
2026: The Current Outlook
The Bank is currently maintaining a Neutral stance at 2.25%. The primary focus is now on external risks like trade uncertainty and U.S. tariffs.
| Date | Action | Change | Policy Rate |
|---|---|---|---|
| January 28, 2026 | Hold | 0.00% | 2.25% |
| March 18, 2026 | Scheduled | TBD | TBD |
| April 22, 2026 | Scheduled | TBD | TBD |
| June 3, 2026 | Scheduled | TBD | TBD |
| July 15, 2026 | Scheduled | TBD | TBD |
| September 9, 2026 | Scheduled | TBD | TBD |
| October 28, 2026 | Scheduled | TBD | TBD |
| December 9, 2026 | Scheduled | TBD | TBD |
Economic Impact: The Housing Cooldown
The aggressive hiking cycle had a direct, intended cooling effect on the Canadian housing market.
Price Correction
As rates (orange line) climbed to 5.00%, housing price growth (blue bars) decelerated rapidly, entering negative territory in 2023.
Mortgage Renewals
60% of mortgages are renewing in 2025/2026. While rates have dropped to 2.25%, many homeowners are still renewing at higher rates than their pandemic-era lows.
Insight: The "Double Cut" in Oct 2024 was pivotal in softening the blow for upcoming renewals.
2026 Outlook & Market Expectations
Mar 18, 2026 Prediction
Likelihood of rate holding steady
The Holding Pattern
Major banks (TD, CIBC, RBC, BMO) forecast the rate to remain at 2.25% throughout 2026, sitting at the bottom of the neutral range.
Upward Risks
Scotiabank & National Bank warn of potential hikes to 2.75% late in the year due to trade tensions and core inflation persistence.
Macro Drivers
Headline inflation is holding near the 2.0% target, though trade tariffs remain a "wildcard" risk.
Upcoming trade agreement reviews with the US and Mexico are driving a cautious "wait-and-see" approach.
Complete Rate Change History (2021–2026)
| Date | Type | Change | New Rate |
|---|---|---|---|
| Jan 28, 2026 | Hold | 0.00% | 2.25% |
| Oct 29, 2025 | Cut | -0.25% | 2.25% |
| Sep 17, 2025 | Cut | -0.25% | 2.50% |
| Mar 12, 2025 | Cut | -0.25% | 2.75% |
| Jan 29, 2025 | Cut | -0.25% | 3.00% |
| Dec 11, 2024 | Cut | -0.50% | 3.25% |
| Oct 23, 2024 | Cut | -0.50% | 3.75% |
| Sep 4, 2024 | Cut | -0.25% | 4.25% |
| Jul 24, 2024 | Cut | -0.25% | 4.50% |
| Jun 5, 2024 | Cut | -0.25% | 4.75% |
| Jul 12, 2023 | Hike | +0.25% | 5.00% |
| Jun 7, 2023 | Hike | +0.25% | 4.75% |
| Jan 25, 2023 | Hike | +0.25% | 4.50% |
| Dec 7, 2022 | Hike | +0.50% | 4.25% |
| Oct 26, 2022 | Hike | +0.50% | 3.75% |
| Sep 7, 2022 | Hike | +0.75% | 3.25% |
| Jul 13, 2022 | Hike | +1.00% | 2.50% |
| Jun 1, 2022 | Hike | +0.50% | 1.50% |
| Apr 13, 2022 | Hike | +0.50% | 1.00% |
| Mar 2, 2022 | Hike | +0.25% | 0.50% |
| 2021 (All Year) | Hold | 0.00% | 0.25% |
Source: Bank of Canada, WOWA.ca
Looking Ahead: 2026 and Beyond
The Bank of Canada has signaled a period of rate stability with the overnight rate now at the neutral level of 2.25%. Key considerations:
Inflation Control
Inflation has returned to the 2% target range, allowing the BoC to maintain current rates without further tightening.
Economic Growth
GDP growth forecast at 1.1% suggests a balanced approach between supporting growth and maintaining price stability.
Housing Recovery
Lower rates are expected to support a gradual recovery in housing activity throughout 2026, particularly in major urban centers.
Take Advantage of Current Rates
With rates stabilizing at neutral levels, now is an excellent time to explore your mortgage options. Our team can help you navigate the current market and secure the best rates available.