Bank of Canada Interest Rate Explained

How the Bank of Canada Sets Interest Rates

Eight Fixed Rate Announcement Dates Each Year

Current Official Policy Rate

How This Rate Affects Mortgage and Home Loan Rates

This rate reflects the most recent Bank of Canada policy decision and helps you understand current lending conditions.

Bank of Canada Interest Rate (Current Rate & Real Estate Impact)

The Bank Of Canada Interest Rate, Also Known As The Key Policy Rate, Plays A Major Role In Shaping Canada’s Economy And Real Estate Market. Changes To This Rate Directly Influence Mortgage Interest Rates, Borrowing Costs, And Housing Affordability. Understanding How The Bank Of Canada Sets Rates Can Help Home Buyers, Sellers, And Investors Make Informed Real Estate Decisions.

How the Bank of Canada Sets Interest Rates

The Bank Of Canada Sets Interest Rates As Part Of Its Monetary Policy To Keep Inflation Stable And Support Sustainable Economic Growth. By Adjusting Its Key Policy Rate, The Bank Influences How Much It Costs For Banks To Borrow Money, Which Then Affects Interest Rates Across The Economy — Including Mortgage Rates Offered To Consumers.

Bank of Canada Rate History and Trends

Looking At The Bank Of Canada’s Rate History Provides Valuable Insight Into Long-Term Economic Trends. Rate Cycles Typically Reflect Inflation Pressures, Economic Slowdowns, Or Periods Of Growth. Reviewing Past Rate Movements Can Help Homeowners And Investors Better Prepare For Future Changes.

Bank of Canada Policy Rate History

Official Bank of Canada policy interest rate decisions (last 12 announcements).

Date (Effective)	Target (%)	Change
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Rates are shown as of their effective (implementation) date. Policy decisions are announced one day earlier.

Bank of Canada Rate Announcements (Current Year)

Announcement Date	Effective Date	Status
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Eight Fixed Rate Announcement Dates Each Year

At The Center Of Monetary Policy Is The Overnight Lending Rate. This Is The Interest Rate That Major Financial Institutions Use To Lend Money To Each Other For One Day. The Bank Of Canada Sets A Target For This Rate, And Most Short-Term Interest Rates — Including Variable Mortgage Rates — Move In Response To Changes In It.

Monetary Policy and the Overnight Lending Rate

How the Bank of Canada Rate Affects Mortgage Rates

When The Bank Of Canada Raises Or Lowers Its Key Rate, Mortgage Rates Often Move In The Same Direction. Variable-Rate Mortgages Are Usually Affected Almost Immediately, While Fixed Mortgage Rates Tend To React To Changes In Bond Yields And Market Expectations. Even Small Rate Changes Can Significantly Impact Monthly Payments And Buying Power.

Impact of Interest Rates on the Canadian Real Estate Market

Interest rate changes influence housing demand, home prices, and market activity. Higher rates can reduce affordability and slow buyer activity, while lower rates often increase demand and competition. Understanding these trends helps buyers time purchases and sellers price their homes more strategically.