The Bank of Canada rate hold on July 15 keeps the policy interest rate at 2.25% and prime at 4.45%. The next announcement is September 2, so nothing about those two numbers moves before then. If you have been waiting for a cut to consolidate debt or refinance, the math you can run today is the math you have all summer.
One thing first, before any of the detail. If you are thinking about borrowing against your home, ask your own bank. If they approve you at a competitive interest rate, that is usually your cheapest option and you do not need a broker to arrange it. Come back if they say no.
Why the Bank of Canada is holding its interest rate at 2.25%
On July 15, 2026 the Bank of Canada held its target rate at 2.25% for a sixth consecutive meeting. The central bank last changed the rate in October 2025. It also held in January, March, April and June this year.
Where the numbers stand:
- Target for the overnight rate. 2.25%
- Bank Rate. 2.5%
- Deposit rate. 2.20%
- Prime rate at most lenders. 4.45%
- Next rate announcement. September 2, 2026
Inflation and growth: inside the July 2026 decision
The Governing Council's reasoning was steady. Headline inflation in Canada has climbed above 3%, pushed up mostly by energy prices, while inflation outside of gasoline sits near the 2% target. Economic activity had stalled for the past year and now looks to have resumed. The July 2026 Monetary Policy Report projects growth of 0.7% this year, with inflation easing back towards 2% into 2027 as commodity prices settle. With uncertainty around United States trade policy still elevated, the Bank judged the current interest rate appropriate for now.
For anyone with a mortgage, every Bank of Canada rate decision since last October has landed the same way: no change. Stable policy means the numbers you run this week still hold next month.
What an overnight rate unchanged at 2.25% means for your mortgage
Variable rate mortgages are priced off prime, and prime has sat at 4.45% since the October cut. A rate held at 2.25% means variable payments stay where they are, and the announcement signalled no hikes ahead. Anything else tied to prime holds steady too.
Fixed mortgage rates work differently. They follow Government of Canada bond yields, so a renewal offer can move even while the Bank of Canada holds its interest rate steady. Canada Mortgage and Housing Corporation estimates about 1.5 million households renewed their mortgage by the end of 2025, with roughly a million more renewing through 2026. If yours is one of them, a stable prime is useful information. You can weigh your mortgage renewal or refinance options against known numbers instead of guessing where interest rates across the economy are headed.
Home equity line of credit rates in Canada right now
A home equity line of credit is priced as prime plus a spread, at a variable interest rate. With prime steady at 4.45%, equity-secured rates start from about 4.95%, and qualified homeowners can borrow up to 80% of the value of their home. A variable interest rate cuts both ways. If prime falls, your cost falls with it. If prime rises, it climbs. There is no forecast in that, only the number in front of you today.
Most lenders on this product let you pay interest only on what you draw. That keeps the payment low, and for a short-term borrow that flexibility is the point. Be clear on the trade-off: an interest-only payment does not reduce what you owe. It works when the line is a tool you plan to pay down, and only works against you if the low payment becomes the reason the balance never moves.
Equifax data reported by Canada Mortgage and Housing Corporation shows $230.9 billion in outstanding home equity line of credit balances at the end of 2025, up more than 5% in a year. The draw is the gap between rates. Equifax Canada puts the average Canadian's non-mortgage debt near $22,000, and a credit card charging around 21% is an expensive place to carry it when equity-secured credit is priced off a 4.45% prime. Moving higher-interest balances onto one credit limit means one payment at a lower interest rate instead of several.
What using a broker actually costs you
If the bank says no and you go the private or alternative route, there are fees, and you should see them in dollars before you sign. These lenders charge a lender fee, and the broker arranging it charges a broker fee. Both are usually a percentage of what you borrow, and both typically come off the top, so the money that lands in your account is less than the number on the approval. On a prime deal it works differently: the lender pays the broker a commission, not you. That is normal and legal. It is also worth knowing, because the product that pays the broker best and the product that costs you least are not always the same one. Ask any broker, including us, why they picked the lender they picked. If anyone will not put the fees in writing, walk away.
When holding pattern beats borrowing
A rate hold is not a reason to borrow, and there are times you should not, regardless of what that does for our business. If you are drawing on your home to cover a monthly gap between income and expenses, this does not fix anything. It turns a cash flow problem into secured debt and buys a few months. When the money runs out the gap is still there, and now the house is attached to it. Borrowing against equity works when it clears a defined balance at a lower interest rate and the payment plan actually retires it. It does not work as a way to keep an unaffordable month afloat.
Make the Bank of Canada rate hold work for you
The interest rate announcements follow a fixed schedule, and nothing is scheduled between now and September 2. A cut may come eventually. One is not promised, and waiting for it carries a monthly cost while balances sit at 21%. If consolidation makes sense at 4.95% today, it makes sense today. If it does not, you will have learned that at no cost and can plan for renewal season with clear numbers.
Case study: moving $58,000 to one payment at 4.95% in Barrie
Daniel and Priya owned a home in Barrie valued at $760,000 with a $415,000 mortgage. Alongside it they carried about $58,000 in non-mortgage debt across two credit cards and an unsecured line of credit, with minimum payments near $1,740 a month. They spent the spring waiting for a rate cut before consolidating, and the balances barely moved. Lighthouse arranged a home equity line of credit at 4.95%, secured by the equity they had built over nine years of payments. The $58,000 moved onto the line, where the interest cost is about $239 a month, and they set their own repayment at $700 a month so the balance keeps falling. Their monthly outlay on that debt dropped by roughly $1,000, and the debt now has an end date. The change took one conversation and about two weeks, not a rate cut.
Frequently asked questions
When is the next Bank of Canada interest rate announcement?
September 2, 2026. The central bank announces its key interest rate on eight fixed dates each year, and the July 15 decision was the fifth of 2026. Between announcements the rate does not move.
What is the difference between the Bank of Canada interest rate and the prime rate?
The Bank of Canada interest rate is the overnight rate, the benchmark that anchors borrowing costs across the financial system. Financial institutions then set their own interest rates, and prime, currently 4.45%, is what most variable mortgages and lines of credit are priced against. When that benchmark holds, prime holds with it.
How do Bank of Canada rate changes affect my mortgage?
A change to the overnight rate moves prime within days, which changes the interest portion on a variable rate mortgage and any balance tied to prime. Fixed rate holders feel rate changes at renewal instead. This month there is nothing to absorb, because the Bank held the rate steady at 2.25%.
Will interest rates drop before the end of 2026?
Nobody can promise rate changes, and no broker should. The Bank weighs inflation and growth at every meeting, it can hold, cut or raise its interest rate at any of them, and forecasts have missed in both directions before. The practical approach is to run your numbers on today's rates and treat any future cut as a bonus, not a plan.
Run your numbers on today's rates
If you have been waiting for interest rates to move before dealing with the balances, the Bank of Canada rate hold means you already know what this summer looks like. Ask your bank first. If they approve you on a home equity line of credit or a refinance at a competitive interest rate, take it, and you can stop reading here. That is the cheapest outcome available to you and it does not involve us. If the bank declines you, or the structure is complicated enough that the bank cannot solve it, that is when a broker is worth the fee. We will tell you which option fits, what it costs in dollars, and if the answer is that you should not borrow against the value of your home right now, we will tell you that instead. Get every fee in writing, from us or from whoever you use.
This article is general information, not mortgage advice. Rates, lending criteria and regulations change. Speak with a licensed mortgage professional about your specific situation before making decisions.
