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Test your knowledge
If the Bank of Canada keeps its policy interest rate steady, can fixed mortgage rates increase anyway?
September 21st, 2026
Answer: Yes.
The policy interest rate has a direct influence on many variable rates, particularly through the prime rates charged by financial institutions. However, fixed mortgage rates also depend on the cost at which lenders can find funding in the markets.
This cost is influenced, in particular, by bond yields, which can vary depending on expectations about inflation rates, economic growth and what central banks are going to do in the future. As a result, fixed mortgage rates can move up or down even when the Bank of Canada’s policy interest rate doesn’t change.
To learn more about this topic, read this article.
The following sources were used to prepare this article:
Bank of Canada, “What’s behind your mortgage rate.”
Investopedia, “Mortgage Rate: Definition, Types, and Determining Factors.”
