Bank of Canada Holds Interest Rate - August 2026

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The Bank of Canada announced on September 2, 2026 that it is maintaining its overnight policy rate at 2.25%. The Bank Rate remains at 2.50%, while the deposit rate remains at 2.20%. This continues a series of rate holds after the Bank last lowered its policy rate in October 2025. 

For anyone buying or selling real estate in Abbotsford, Chilliwack, Mission or elsewhere in the Fraser Valley, the decision provides some continued stability around borrowing costs. Mortgage rates are influenced by several factors—not just the Bank of Canada's overnight rate—but a steady policy rate gives buyers and homeowners greater certainty as they plan their next move.

The economic picture has also improved. Canada's GDP grew 3.3% in the second quarter, following very weak growth in the first quarter, while unemployment edged down to 6.4% in July. The Bank described the recovery as broadening, although it continues to see excess supply in the economy. 

For Fraser Valley home buyers, this comes at an interesting time. Housing inventory remains elevated and buyers currently have more choice and negotiating power than they did during the highly competitive markets of recent years. A stable Bank of Canada rate combined with increased housing selection can give buyers something valuable: more time to make an informed decision.

Stable interest rates can help provide some certainty for prospective buyers, but sellers are operating in a market where pricing and presentation matter more than they have in recent years. Buyers are still buying, but with more properties to choose from, they're paying close attention to value. For sellers in Abbotsford, Chilliwack and Mission, successful strategies continue to centre around realistic pricing, professional marketing and understanding the competition before bringing a property to market. The goal isn't simply to list a home—it's to position it properly within today's market.

Today's announcement is particularly interesting because the Bank is balancing an improving Canadian economy against renewed inflation risks. CPI inflation has recently been around 3%, largely due to persistently higher gasoline prices. However, inflation excluding gasoline was 2.2% in July, while measures of core inflation remained close to 2%.  The Bank is also watching higher energy prices related to the continuing conflict in the Middle East, along with new U.S. tariffs and Canadian counter-tariffs. These factors could increase costs for businesses and eventually contribute to consumer prices. That helps explain why the Bank is maintaining its current rate rather than moving quickly in either direction.

It's important to remember that the Bank of Canada policy rate and mortgage rates are not the same thing. Variable-rate mortgages and lines of credit are generally more directly affected by changes in the Bank of Canada policy rate through lenders' prime rates. A rate hold therefore means borrowers shouldn't expect an automatic change simply because of today's announcement. Fixed mortgage rates work differently and are influenced more heavily by Canadian bond yields and financial-market expectations. In fact, the Bank noted that long-term bond yields have increased globally, including in Canada, since its July announcement. 

That means a Bank of Canada rate hold doesn't necessarily mean every available mortgage rate will remain unchanged.

The Bank of Canada continues to take a measured approach. Economic growth has improved, but uncertainty remains elevated. The Bank is watching whether Canada's economic recovery can continue while also monitoring the risk that higher energy prices and tariffs could create additional inflation. The Bank has made it clear that it is prepared to adjust monetary policy as necessary based on how economic growth and inflation evolve. 

The next Bank of Canada interest rate announcement is scheduled for October 28, 2026, when the Bank will also release its next Monetary Policy Report. Whether you're buying your first home, upgrading, downsizing, renewing a mortgage or simply wondering what today's interest rate environment means for your plans, understanding both interest rates and local Fraser Valley real estate conditions can help you make a more informed decision.

Thinking about making a move in Abbotsford, Chilliwack or Mission? Call Curt.

I can help you understand what today's real estate market means for your buying or selling plans.

Read the September 2, 2026 Bank of Canada rate announcement