What the Bank of Canada's next cut means for your mortgage
Using the Bank's own projections to work out how far rates can fall, and what a 25-point move does to a typical renewal.
A rate cut sounds simple. The policy rate drops, borrowing gets cheaper, everyone celebrates. The more interesting question is how much of that cut actually reaches a household renewing a five-year fixed mortgage this winter, because fixed rates follow bond yields, and bond yields have already priced most of what the Bank is expected to do.
Policy rate
2.50%
Bank of Canada, Sept 2026
5-yr GoC yield
2.9%
Drives fixed mortgage pricing
Renewals in 2026
1.2m
Derived from CMHC data
Avg. payment shock
+14%
Model assumption, 2021 vintage
reported factderived calculationmodel assumption
01The cut, not the headline
At 2.50%, the overnight rate is already 250 basis points below its 2024 peak. Variable-rate borrowers felt every one of those steps. Fixed-rate borrowers felt almost none, because the five-year Government of Canada yield that lenders price against bottomed out months earlier and has moved sideways since.
02Where the renewal wall sits
Roughly 1.2 million mortgages come up for renewal in 2026, most of them originated in 2021 at rates below 2%. Even after the cuts, those households renew into something closer to 4%. That gap, not the policy rate, is the number that shapes consumer spending next year.