When Will Mortgage Rates Go Down in Canada? An Honest, Dated Answer

Will mortgage rates go down in Canada in 2026?

Honestly, nobody knows for certain. As of September 12, 2026 the Bank of Canada policy rate is 2.25%, held since October 2025. Whether it drops again this year depends on inflation and the economy, which no one can promise. I would plan around your budget, not a forecast.

Here is the honest context most headlines skip. Rates already came down a long way. The Bank of Canada cut its policy rate from 3.00% in early 2025 down to 2.25% by that autumn. The big relief has mostly happened.

Then it stopped. The Bank has held at 2.25% at every scheduled meeting in 2026, most recently on September 2. The reason is simple. Inflation ticked back up to 3.2% in May 2026, above the Bank's 2% target, so it is waiting rather than cutting.

The Bank's own April 2026 Monetary Policy Report projects inflation easing back toward 2% in 2027. That is a projection, not a promise. It hints at room to cut later, but it is not a date you can bank on.

So will mortgage rates go down in Canada in 2026? Maybe a little, maybe not at all. The Bank has four more decisions this year, and it will move only if the data lets it. That uncertainty is exactly why I look at fixed versus variable through the lens of your budget, not a guess.

Real data, straight from the source

Where have Canadian mortgage rates actually gone?

Down, then flat. The Bank of Canada policy rate, the one your variable mortgage follows, fell from 3.00% in January 2025 to 2.25% by October 2025. It has stayed at 2.25% ever since, through the September 2, 2026 decision. The chart below is the real Bank of Canada data, not an estimate.

Hover or tap any point to see the rate on that date.

That drop is why 2025 felt like relief for variable holders. The flat line since is the Bank waiting on inflation. Read together, it suggests the fast, easy cuts are likely behind us, and any further drop will be slower and data driven.

What should I do instead of waiting for rates to drop?

Get ready, do not guess. You cannot time the bottom, so set yourself up to win either way. Lock a rate hold while you shop, choose a mortgage with a smaller break penalty so you can switch if rates fall, and start your renewal early. Then a lower rate helps you and a higher one does not trap you.

Lock a rate hold while you look

A pre-approval can hold a rate for roughly 60 to 120 days. It protects you if rates rise while you shop. Ask one blunt question up front: if rates fall while I am held, do I automatically get the lower one? The answer decides how much that hold is really worth.

Choose the smaller penalty, not just the lowest rate

If rates do fall in a year or two, you want to be free to move. A mortgage with a smaller break penalty lets you switch and capture the saving. A rate is not just a rate, the penalty matters. It is why I weigh the exit cost on every fixed versus variable call.

Start your renewal early and negotiate

Do not wait for the mailed renewal letter, which is almost never the best offer. Start about 120 days out and gather competing quotes. A federally regulated lender must send your renewal statement at least 21 days before your term ends, and the rate it quotes cannot rise before your renewal date. That gives you a safe baseline to negotiate from. Decide with a competing offer in hand, not out of loyalty. Here is how to negotiate your mortgage rate step by step.

That is the honest playbook. Instead of betting on a date nobody can promise, you set yourself up to win whichever way rates go. Before you do anything, it helps to run your real numbers so you know your true budget today.