Mortgage Rates in Canada August 2026 Update
There’s no Bank of Canada rate announcement this month the next one isn’t until September 2, 2026. But “no meeting” doesn’t mean “no movement.” Bond yields have been climbing, job numbers came in stronger than expected, and fixed mortgage rates are quietly shifting even while the policy rate sits still. Here’s what’s actually happening with Canada mortgage rates in August 2026, and how to use this quiet month to your advantage.
Where Rates Stand Right Now
- Bank of Canada policy rate: 2.25%, unchanged since October 2025
- Prime rate (Big Six banks): 4.45% — TD’s variable mortgage prime sits slightly higher at 4.60%
- 5-year Government of Canada bond yield: hovering around 3.18%–3.23% in early August
- Typical 5-year fixed mortgage rates: still generally in the low-to-mid 4% range, with some short-term insured fixed products priced closer to 2.5%–3%
Variable rates haven’t budged since they’re tied directly to the policy rate. Fixed rates, on the other hand, follow the bond market and the bond market has had a busier month than the Bank of Canada has.
Why Bond Yields (and Fixed Rates) Have Been Under Pressure
Fixed mortgage rates move with government bond yields, not the overnight rate, which is why they can shift even during a BoC hold. A few things have pushed yields higher through late July and into August:
- Shipping disruptions overseas — tension around the Strait of Hormuz and partial closures of Red Sea routes have added upward pressure on yields tied to energy-driven inflation concerns.
- A hawkish U.S. Federal Reserve — the Fed held its own benchmark rate steady for a fifth straight time in late July, with some voting members pushing for a hike rather than a cut. That keeps U.S. Treasury yields elevated, which pulls Canadian bond yields up with them.
- A surprisingly strong Canadian jobs report — Canada added 75,000 jobs in July, well above forecasts, and the unemployment rate dropped to 6.4%. Strong employment data generally reduces the odds of a rate cut, since it signals the economy doesn’t need extra stimulus.
Put together, these factors are why some lenders have nudged fixed rates upward even though the Bank of Canada hasn’t made a move since October.
What This Means If You’re Buying, Renewing, or Refinancing
If you’re on a variable rate: your payment isn’t changing this month, and most forecasters don’t expect the Bank of Canada to cut in September either — a hold is still considered the most likely outcome.
If you’re shopping for a fixed rate: waiting for the September announcement probably won’t help you. Fixed pricing is driven by the bond market, and that market has already been moving without any Bank of Canada involvement. If anything, rates are more likely to drift up than down before the next decision.
If your mortgage is coming up for renewal: this is a good window to lock in a rate hold with a lender, since it protects you from further bond-driven increases while you finalize your decision.
What to Watch Before September 2
A few data points will shape whether the Bank of Canada holds again or shifts its tone:
- Inflation readings — headline inflation has been running hotter than the Bank’s 2% target, largely due to gasoline prices, while core inflation stays closer to target.
- Trade developments — the CUSMA (USMCA) review is ongoing, and any resolution (or escalation) could move bond yields quickly.
- Employment data — another strong jobs report would further reduce the odds of a rate cut.
Most major banks currently expect the Bank of Canada to hold at 2.25% again on September 2, with any potential rate hike more likely in late 2026 or 2027 depending on the institution.
What Should You Do This Month?
- Get pre-approved or rate-held now rather than waiting for the September decision — it won’t necessarily bring better pricing.
- Compare fixed vs. variable based on your risk tolerance and timeline, not just on what the headlines say the Bank of Canada might do next.
- Talk to a mortgage professional if you’re within 4–6 months of a renewal — bond-driven rate creep can add up over a mortgage term.
Frequently Asked Questions
Is there a Bank of Canada rate announcement in August 2026?
No. The Bank of Canada only announces policy rate decisions eight times a year, and there is no scheduled meeting in August 2026. The next decision is September 2, 2026.
Why are fixed mortgage rates changing if the Bank of Canada rate hasn’t moved?
Fixed mortgage rates follow government bond yields, not the Bank of Canada’s overnight rate. Bond yields have risen recently due to global energy market disruptions and a hawkish U.S. Federal Reserve, which has pushed some fixed rates slightly higher.
What is the prime rate in Canada right now?
As of August 2026, the prime rate at Canada’s major banks is 4.45%, unchanged since the Bank of Canada’s last rate cut in October 2025.
Will the Bank of Canada cut rates in September 2026?
Most economists currently expect another hold at the September 2 announcement, though this depends on upcoming inflation and employment data.
Should I lock in a mortgage rate now or wait until September?
Since fixed rates are driven by bond yields rather than the Bank of Canada’s schedule, waiting for the September announcement is unlikely to guarantee a better rate. Many borrowers choose to secure a rate hold now to protect against further bond-driven increases.
Final Thoughts
August is a quiet month on the Bank of Canada’s calendar, but it’s anything but quiet in the bond market and that’s what really drives fixed mortgage pricing. If you’re planning to buy, renew, or refinance in the next few months, this is a good time to get ahead of any further movement rather than waiting for a headline that may not change much.
Right Choice Mortgages can walk you through your current options in plain language, based on your actual numbers. Whether you’re weighing fixed vs. variable or just want a rate hold in place before September, our team is here to help.
Ready to talk about your mortgage options? Contact Right Choice Mortgages today to book your free consultation.
This article is for general informational purposes only and does not constitute professional mortgage or other financial advice. Always consult with a licensed financial professional for advice tailored to your specific financial situation. Right Choice Mortgages. assumes no liability for reliance on this content.
