2026 Bank of Canada Rate Hold: Ultimate Guide to Your Mortgage Renewal Strategy

If you’re facing a Bank of Canada rate hold in 2026, you’re not alone – millions of Canadian homeowners are navigating one of the most uncertain rate environments in decades.

The Bank of Canada held its overnight rate at 2.25% on January 28, 2026, marking its second consecutive pause since December. This decision carries massive implications for your mortgage renewal, especially if you’re one of the thousands of homeowners in Milton, Oakville, Burlington, and the GTA whose mortgages are coming up for renewal this year.

As an FSRA licensed mortgage agent serving the Halton region since 2025, I’ve seen firsthand how rate holds can create both opportunities and confusion for homeowners. Governor Tiff Macklem made it clear that “elevated uncertainty makes it difficult to predict the timing or direction of the next change in the policy rate” – but that doesn’t mean you should sit back and wait. Here’s what this rate hold actually means for your mortgage renewal and the strategic moves you need to make right now.

What the Bank of Canada Rate Hold 2026 Actually Means

The Bank of Canada today held its target for the overnight rate at 2.25%, with the Bank Rate at 2.5% and the deposit rate at 2.20%. But what does this actually mean for your mortgage? It’s not just about keeping rates the same – it’s about the underlying economic forces that are shaping your renewal options.

The Governing Council judges the current policy rate remains appropriate, but uncertainty is heightened and they’re monitoring risks closely. Translation: they’re not cutting rates further, but they’re also not confident enough to raise them yet. This creates what I call the “renewal sweet spot” – a period where you have maximum flexibility to shop around.

The Prime Rate Connection

Canada’s prime rate currently sits at 4.45%, where it remains following the Bank’s January 2026 rate hold. This prime rate directly affects variable mortgages, HELOCs, and other variable-rate products. If you have a variable mortgage, your rate isn’t changing – for now.

But here’s what most people don’t realize: The best variable rates are currently around 3.35%, the lowest levels since mid-2022. If you’re renewing from a mortgage you got in 2021 or earlier, you might actually be looking at lower rates than what you had before.

Why the 2026 Bank of Canada Rate Hold Matters for Your Renewal

This isn’t your typical rate hold. The Canadian economy continues to adjust to US tariffs and the new global trade landscape, with growth expected to be modest. What makes 2026 different is the perfect storm of factors creating uncertainty: US trade policy, inflation pressures, and economic adjustment.

Nearly 75% of economists forecast the central bank will stand pat through 2026. This gives you something rare in the mortgage world: predictability. You can plan your renewal strategy knowing that variable rates likely won’t move dramatically in either direction for the next several months.

The Inflation Picture

CPI inflation picked up in December to 2.4%, but the Bank’s preferred measures of core inflation have eased from 3% in October to around 2½% in December. The Bank is watching core inflation more closely than headline numbers, and the trend is moving in the right direction.

For your renewal, this means the Bank isn’t under pressure to raise rates aggressively to fight inflation. They’re in a holding pattern, which gives you negotiating power with lenders.

How to Navigate Your Mortgage Renewal During the Rate Hold

The rate hold creates a unique opportunity, but only if you act strategically. Here’s your step-by-step approach:

Step 1: Don’t Default to Your Current Lender

Your bank sent you that renewal letter 4-6 months before your maturity date. They’re hoping you’ll sign it without shopping around. Don’t. As of January 2026, the best mortgage rates are: 5-year fixed at 3.74-3.84%, and 5-year variable at 3.35%. Your renewal letter probably isn’t offering you the best available rate.

I’ve seen clients in Milton save $2,000-$4,000 annually just by shopping their renewal. One client’s bank offered 5.29% on their renewal. We found 4.09%. On a $400,000 mortgage, that’s $4,800 per year in savings.

Step 2: Consider the Fixed vs Variable Decision

Variable mortgage rates are tracking lower than 5-year fixed rates, with the best five-year variable rate around 3.35% versus five-year fixed rates closer to 3.74-3.84%. The variable rate advantage is significant right now.

But here’s the thing: The market anticipates no further cuts to the Prime rate and we may see our first 0.25% hike by end of 2026. If you’re risk-averse and want payment certainty, fixed might be worth the premium. If you can handle some uncertainty for potential savings, variable looks attractive.

Step 3: Get a Rate Hold

Consider getting a pre-approval and rate hold to lock in a rate for up to 120 days. With the uncertainty around future rate moves, a rate hold gives you protection if rates rise while you’re shopping around.

Most lenders offer 90-120 day rate holds. Some brokers can get you longer holds with certain lenders. This costs you nothing and gives you options.

Common Mistakes to Avoid During the Bank of Canada Rate Hold

Mistake #1: Assuming Rates Will Stay Low Forever

Given the trade uncertainty and policy dilemma, the policy rate is unlikely to experience significant change over 2026, but food and services prices continue to apply upward pressure. The rate hold is temporary. Plan accordingly.

I’m seeing clients lock in longer-term fixed rates now as insurance against future increases. Optimistic forecasts suggest five-year fixed rates could remain near 4.5% by end of 2026, but it’s possible they could rise to 5% by end of 2026.

Mistake #2: Ignoring the Stress Test Impact

In Canada, mortgages are stress tested at the higher of 5.25% or your contract rate plus 2%. With current rates, the stress test is the contract rate + 2%. This affects how much you can borrow if you’re switching lenders.

If you’re switching lenders at renewal, you need to re-qualify. If you’re staying with the same lender, you don’t. This can impact your strategy, especially if your income has changed or you want to increase your mortgage amount.

Mistake #3: Focusing Only on Rate

The lowest advertised rate is often attached to a restricted mortgage, which limits flexibility. A full-feature mortgage typically comes with a slightly higher rate, but offers more options.

Features matter: prepayment options, portability, convertibility. If you might move, need to make extra payments, or want flexibility, don’t sacrifice features for a rate that’s 0.05% lower.

Expert Tips for Your 2026 Mortgage Renewal Strategy

Tip #1: Use the Rate Hold as Leverage

The Bank of Canada’s pause gives you negotiating power. Lenders know rates aren’t dropping further, so they’re more willing to compete for your business now rather than risk losing you to a competitor.

I tell my clients: get three quotes minimum. Take the best offer back to your current lender and see if they’ll match it. Often they will, especially if you have good payment history and equity in your home.

Tip #2: Consider Your Timeline

The next Bank of Canada interest rate announcement is Wednesday, March 18, 2026. If your renewal is coming up soon, you have time to see what happens at the next announcement before making your final decision.

But don’t wait too long. Rate holds expire, and good rates can disappear quickly if market conditions change.

Tip #3: Think Beyond Your Current Term

Market data suggests the BoC will increase rates 4 times, totalling 1%, over the next 5 years. This would increase Bank Prime by 1% and variable rates by the same.

If you’re considering variable, understand that rates will likely be higher by the end of your term. Factor this into your decision. Can you handle payments if rates go up 1%? Run the numbers.

Areas We Serve in Halton, Ontario Region

Milton: As one of Canada’s fastest-growing cities, Milton attracts young families seeking affordable alternatives to Toronto prices. We work extensively with first-time buyers here navigating competitive offer situations and stress test qualifications on tight budgets. The rate hold gives Milton buyers more certainty when planning their mortgage strategy, especially important given the area’s rapid price appreciation.

Oakville: Oakville’s established neighborhoods and higher property values mean many of our clients are dealing with larger mortgage amounts and more complex financial situations. The current rate environment is particularly beneficial for Oakville homeowners looking to optimize their mortgage structure, whether through refinancing or strategic renewals to access equity for renovations or investment properties.

Burlington: Burlington’s mix of young professionals and established families creates diverse mortgage needs. We see many Burlington clients taking advantage of the rate stability to switch from variable to fixed rates, or vice versa, depending on their risk tolerance and financial goals. The city’s strong employment base in healthcare and manufacturing provides stable income verification for mortgage applications.

Hamilton: Hamilton’s revitalization and growing tech sector have created a dynamic real estate market. Many of our Hamilton clients are self-employed or have non-traditional income sources, making them ideal candidates for alternative lender programs. The current rate environment gives us more options to structure mortgages that work for Hamilton’s diverse employment landscape.

Mississauga: As one of Canada’s largest cities, Mississauga offers everything from condos to executive homes. We work with many Mississauga clients who are upsizing, downsizing, or investing in rental properties. The rate hold creates opportunities for portfolio optimization and strategic mortgage planning, particularly for clients with multiple properties or complex income structures.

Greater Toronto Area: Our GTA clients often face unique challenges with higher property values and stricter lending requirements. The current rate stability allows us to explore creative financing solutions, including private lending options and alternative lender programs that might not be available during periods of rate volatility. We help GTA clients navigate the complex mortgage landscape with access to our full network of 56+ lenders.

Why Halton, Ontario Clients Choose Zuzart Mortgages

As an FSRA licensed mortgage agent (M25001564), I bring a data-driven approach to mortgage planning that’s particularly valuable during uncertain times like the current rate hold environment. My access to 56+ lenders including banks, credit unions, and alternative lenders means I can find solutions when your bank says no.

Since becoming a Milton resident in 2014, I’ve developed deep local market knowledge that helps clients understand not just the numbers, but the context. I specialize in self-employed and complex income mortgages, which is crucial in today’s gig economy where traditional employment verification doesn’t always tell the whole story.

Recent client success: A Burlington business owner was offered 5.89% by their bank for renewal. Through our lender network, we secured 4.24% – saving them $6,600 annually on their $400,000 mortgage. Another Milton family thought they couldn’t qualify for a mortgage switch due to self-employment income. We found a lender who understood their business model and approved them at 4.09%.

What sets me apart is transparency. I explain exactly how the current rate environment affects your specific situation, show you all your options, and let you make informed decisions. My services cost you nothing – lenders pay my fee – but the value I provide in terms of rate savings and mortgage optimization can save you thousands over your mortgage term.

Frequently Asked Questions

Should I renew early to take advantage of current rates?

It depends on your current rate and the penalty for breaking your mortgage early. With the best variable rates currently around 3.35% and fixed rates at 3.74-3.84%, you might save money by breaking early if your current rate is significantly higher. However, you need to calculate the penalty (usually three months’ interest for variable mortgages, interest rate differential for fixed) and compare it to your potential savings. I can run these numbers for you and help you determine if early renewal makes financial sense in your situation.

How long will the Bank of Canada keep rates on hold?

Nearly 75% of economists forecast the central bank will stand pat through 2026, with the Bank saying its overnight rate is at “about the right level”. However, a key source of uncertainty is the upcoming review of the Canada-US-Mexico Agreement, which could change everything. The reality is that while most experts expect stability through 2026, global trade tensions and inflation pressures could force the Bank’s hand. That’s why getting a rate hold now protects you from potential surprises.

Is variable or fixed better during a rate hold?

Variable rates are currently tracking about 0.40-0.50% lower than fixed rates, which is significant savings. However, the market anticipates we may see our first 0.25% hike by end of 2026. If you can handle payment increases and want to save money in the short term, variable makes sense. If you prioritize payment certainty and want to lock in current rates before they potentially rise, fixed is the safer choice. Your decision should be based on your risk tolerance and financial situation, not just the rate differential.

What happens if I need to switch lenders at renewal?

Switching lenders at renewal requires re-qualifying through the stress test, which is currently your contract rate plus 2% (since that’s higher than the 5.25% qualifying rate). This means you need to prove you can afford payments at roughly 5.74-5.84% depending on your rate. If your income has decreased or you have new debts, this could be challenging. However, the benefit is access to better rates and terms. I work with lenders who specialize in renewal switches and can often find solutions even if your financial situation has changed since your original approval.

Should I be worried about rising rates in 2026?

The Bank of Canada has been clear about the uncertainty ahead, but fixed rates are expected to rise slightly, while variable rates are expected to remain broadly stable until mid-2026, with significant further declines unlikely for both. The key is preparation, not panic. If you’re on a variable rate, understand that rates could rise by 0.25-0.50% by year-end. If you’re renewing, consider whether you can handle those increases or if locking in a fixed rate gives you better peace of mind. The current rate hold gives you time to make strategic decisions rather than reactive ones.

Ready to Optimize Your Mortgage Renewal Strategy?

The Bank of Canada rate hold creates a unique window of opportunity for mortgage renewals, but only if you act strategically. Don’t let your bank’s renewal letter be your only option. With access to 56+ lenders and deep knowledge of the current rate environment, I can help you navigate this complex landscape and potentially save thousands on your mortgage.

Whether you’re dealing with a standard renewal, have self-employed income, or need creative financing solutions, I provide transparent advice tailored to your specific situation. My services cost you nothing, but the savings and peace of mind can be substantial.

Carl Zuzart, FSRA Licensed Mortgage Agent (M25001564)
Pineapple Mortgages (License ON 12830)
Serving Milton, Oakville, Burlington, Hamilton, Mississauga & GTA