The Decision: Fifth Hold in a Row
On Wednesday, July 15, 2026, the Bank of Canada held its target for the overnight rate at 2.25 percent, keeping the Bank Rate at 2.5 percent and the deposit rate at 2.20 percent. Alongside the announcement, the Bank released its latest Monetary Policy Report, laying out updated projections for growth and inflation across the Canadian economy.
This was the fifth straight decision to leave the policy rate unchanged, with the Bank pointing to an economy that is showing signs of improvement even as inflation remains elevated because of higher gasoline prices tied to the conflict in the Middle East. Governing Council also flagged ongoing uncertainty from US trade policy as a factor weighing on the outlook.
Why the Bank Held Instead of Moving
Growth picked up in the second quarter, with the Bank estimating economic growth of roughly 2.5 percent, while core inflation measures stayed close to the two percent target once gasoline prices are stripped out. Governing Council judged the current rate still appropriate to support the recovery while gradually working headline inflation back toward two percent, and said it remains prepared to adjust policy if conditions change.
What the Monetary Policy Report Says About the Economy
The Bank's updated projections show global GDP growth slowing to roughly 2.75 percent in 2026, largely a result of the Middle East conflict, before recovering to around 3.25 percent in 2027 and 2028. Domestically, the Bank expects the Canadian economy to grow 0.7 percent in 2026, followed by 1.8 percent growth in both 2027 and 2028 as slack in the labour market is gradually absorbed.
Labour market conditions have stayed soft, with unemployment sitting at 6.5 percent in June, a level the economy has hovered around since late 2024. On the inflation side, headline CPI climbed to 3.2 percent in May largely due to gasoline costs, while inflation excluding gasoline held closer to 2.2 percent, and core measures remained near the Bank's two percent target. The Bank expects headline inflation to stay elevated through June before gradually easing back toward two percent in early 2027, with the path dependent on how oil and gasoline prices evolve.
Overnight Rate
Held at 2.25%, unchanged since the prior decision, marking a fifth consecutive hold.
Bank Rate
Set at 2.5%, the rate financial institutions pay to borrow from the Bank of Canada.
Deposit Rate
Set at 2.20%, the rate paid on deposits held with the Bank of Canada.
Next Decision
September 2, 2026, with the next Monetary Policy Report following October 28, 2026.
What This Means for the Markham Housing Market
For Markham buyers, a fifth consecutive hold means the borrowing environment they have been planning around stays the same heading into the fall market. Variable-rate mortgage and HELOC holders see no change in payment, since the benchmark that prices those products did not move. Fixed-rate mortgage holders remain unaffected until their renewal date, though fixed rates are priced off the bond market and can shift independently of the Bank's overnight rate decisions, particularly with bond yields moving on trade and geopolitical headlines.
Predictability tends to matter as much as the rate level itself. Markham buyers who have been pre-approved and waiting for clarity now have a stable rate environment to act within rather than a moving target. For sellers, a steady rate backdrop generally supports steadier buyer demand than a market bracing for a surprise hike, which can help listings in Unionville, Angus Glen, Cornell, and Berczy Village hold their footing through the summer and into fall.
The bigger variable for Markham specifically is not the domestic rate path but the mix of external pressures the Bank flagged: gasoline-driven inflation tied to the Middle East conflict, and ongoing uncertainty around US trade policy. Buyers and sellers weighing timing decisions should watch those factors alongside the Bank's next scheduled announcement on September 2, 2026, rather than assume the current hold locks in indefinitely.
Neeraj Moolchandani on Reading Rate Announcements as a Markham Buyer or Seller
Neeraj Moolchandani, REALTOR® at Kaizen Real Estate, works with Markham clients who want to understand what a Bank of Canada announcement actually changes for their specific plans, not just the headline number.
When Neeraj walks clients through a rate hold like this one, the conversation focuses on their pre-approval, their renewal date, and their target neighbourhood, because that is what actually determines whether a hold changes anything for their timeline.
What to Watch Between Now and the Next Announcement
Gasoline and Oil Prices
The Bank explicitly tied elevated inflation to gasoline costs stemming from the Middle East conflict. Any further move in oil prices will influence the path of headline CPI heading into September.
US Trade Policy Developments
Uncertainty tied to US trade policy remains a named risk in the Bank's outlook and continues to affect the Canadian dollar and bond yields, which feed into fixed mortgage pricing.
Labour Market Slack
Unemployment has held in the 6.5 to 7 percent range since late 2024. A meaningful change in that range would factor into whether the Bank holds again on September 2.
Your Own Renewal or Pre-Approval Timeline
Rate holds are only useful information if they are mapped against your specific mortgage timeline. A mortgage broker and REALTOR® working together can translate the announcement into an actual plan.
Wondering How This Rate Hold Affects Your Markham Plans?
Whether you are buying, selling, or renewing, book a consultation with the Kaizen Real Estate Team and get a plain-language read on your specific situation.