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The Bank of Canada Held Rates. Your Fixed Rate Is Still Going Up.
- Gary McGowan
- 11 minutes ago
- 6 min read
The Bank of Canada held the policy rate steady at 2.25% today. That's now a year and a half at the same rate, going back to October 2024.
Sounds boring on the surface. It isn't.
Tiff Macklem and his team also signalled that rate hikes are back on the table if oil prices keep climbing. Bond yields started moving up the same morning, which means fixed mortgage rates are already shifting before the headlines catch up.
If you're buying, refinancing, closing on a pre-construction condo, or self employed and trying to qualify for a mortgage, this episode of the RealtyChatter Podcast covers the parts that actually matter to your wallet.
TL;DR
Bank of Canada held at 2.25%. No change for variable rate borrowers.
Oil shock is the wildcard. If prices keep rising, rate hikes return.
Bond yields trending up. Fixed rates likely to move before variable.
Toronto unemployment hit 8.1%. AI is replacing entry level bank jobs at scale.
RBC blanket mortgages can save pre-construction buyers from a low appraisal, but qualifying is harder than people think.
Self employed with one year of financials? You can still buy this year. There's a path.
Asset-rich but income-modest? The net worth program at major Canadian banks is worth a conversation.
What the Bank of Canada Actually Said
No change to the rate. But the commentary matters more than the decision.
The Bank is watching the global oil shock and choosing not to react with a knee jerk hike. They got burned last cycle by raising too late. This time they're trying to balance instead of overcorrect.
For variable rate holders, nothing changes today. Your payment stays where it was.
The story underneath is different. There are two pressures pulling at the same time. Tariffs from south of the border keep ramping up, which is dragging on the Canadian economy. The Middle East situation keeps oil prices volatile. The Bank's "narrow path" keeps getting narrower.
My opinion: Don't get comfortable with the hold. The next announcement is the one to watch. If oil stays elevated and bond yields keep climbing, fixed rates are going up regardless of what the Bank does with the policy rate.
Why Bond Yields Matter More Than the Headlines
Fixed mortgage rates don't follow the Bank of Canada. They follow the bond market.
The morning of the announcement, the 5 year Government of Canada bond yield was already trending up. That's the leading indicator for where fixed rates are going. If you've been quoted a fixed rate this week and you're sitting on the offer, the rate you were quoted yesterday might not be the rate you get tomorrow.
If you're rate shopping right now, lock the quote in writing and move quickly.
The Economy Underneath: AI, Layoffs, and a Shifting Job Market
Toronto's unemployment rate just rose past 8%. Rogers is offering buyout packages to a massive number of employees. Amazon has been quietly cutting at the senior levels.
Dion shared something most people aren't talking about. A friend at one of the major Canadian banks has a new role: shadow the senior wealth managers and document what they do, so the bank can replace the entry level analyst pipeline with AI.
Hiring has been paused. The bench isn't being built. The work that used to train the next generation of bankers is being absorbed by software.
This matters for two reasons:
First, employment data feeds directly into the Bank of Canada's decisions. If unemployment keeps climbing, that's a signal for cuts, not hikes.
Second, the people losing those jobs are exactly the buyers and homeowners who took out mortgages over the last five years. Watch this number.
My opinion: Gary Vee has been right for a long time on this. The trades are where the next decade of opportunity sits. AI infrastructure needs power, cooling, and HVAC at industrial scale. If you've got a kid finishing high school, that's a real conversation to have.
RBC's Blanket Mortgage: The Pre-Construction Buyer's Lifeline
This is the part of the episode every pre-construction buyer in the GTA needs to hear.
If you bought a condo three years ago for $900K, and that same unit is worth $800K today, you have a $100K appraisal gap. Most banks will only lend against today's value. That means more down payment out of pocket at closing, sometimes six figures more.
RBC's blanket mortgage program treats the original purchase price as the appraised value. They look past the current market drop and lend based on what you originally agreed to pay.
That's the good news.
The catch most buyers don't hear: RBC's qualifying criteria are tight. Many people who hope to use the program don't actually qualify when their file gets reviewed.
My opinion: If you're closing on a pre-construction unit and you're banking on RBC's blanket mortgage, start the conversation early. Not 30 days before closing. Now. If RBC says no, you'll need a broker working a different angle, and that work takes time.
Self Employed and the Bank Said No: Mike's Story
Dion shared a real client story that plays out hundreds of times a month across Canada.
Mike runs a window installation business. He clears over a million in revenue. He pays himself decently, but not enough on paper to satisfy a major bank's qualifying ratios. He's also only been in business 12 months, so he doesn't have the two year track record the banks want to see.
Every bank Mike approached said no.
Here's what got him into the property up in Barrie this year:
Alternative lender approval based on real income. Some lenders look at business deposits and gross revenue, not just T1 line 150. Mike qualified.
A two year exit plan built before closing. Dion and his team mapped out exactly what Mike needs to declare in year two so he can refinance into a major bank in 2027.
Coordination with his accountant. This is the step most brokers skip. Mike's accountant is now in the loop, declaring income the right way to support the future move.
Alternative lender rates are higher. That's the trade off. The point is they're a bridge, not a destination.
My opinion: If you're self employed and a bank told you no, that's not the end of the answer. It's the start of a different conversation. Get a second opinion before you assume the deal is dead.
The Net Worth Program: When Income Falls Short but Assets Don't
This one surprises a lot of people.
You're buying a $1M property. You've got $200K for the down payment. You need an $800K mortgage. Your income only qualifies you for $600K.
You're $200K short. But on the side, you have $1M sitting in RSPs or non-registered investments. You don't want to touch it. It's compounding.
Major Canadian banks have a net worth program that takes liquid investments into account. If you can prove you have the assets, and prove you've held them for at least 12 months, the bank will push your approval up to the number you actually need.
You don't have to withdraw the money. You just have to prove it's yours and it's been there.
This is also a powerful tool for parents helping kids buy. If mum and dad are pensioners with $800K in managed funds and they co-sign, that net worth gets factored into the file. The income strength comes from the assets, not the pension cheque.
For retirees drawing income, RIF withdrawals also qualify as income for mortgage purposes.
What This Means For You This Week
If you're a variable rate holder: nothing changes today. Watch the next announcement.
If you're rate shopping for a fixed: lock your quote in writing and move. Bond yields are climbing.
If you're closing on pre-construction: start the RBC blanket mortgage conversation now if you're considering it. Have a backup broker lined up.
If you're self employed: don't take a bank's no as a final answer. There's almost always a path, but it requires a strategy that goes 12 to 24 months out.
If you're asset-rich but income-light: ask about the net worth program before you assume you can't afford the home you actually want.
FAQ
What is the current Bank of Canada policy rate?
As of April 29, 2026, the Bank of Canada policy rate is 2.25%. It has held at this level since October 2024.
Will the Bank of Canada raise rates in 2026? The Bank signalled that rate hikes are possible if oil prices keep climbing and inflation pressures return.
No hike was announced today, but the next decision will be closely watched.
What is an RBC blanket mortgage?
RBC's blanket mortgage program allows pre-construction buyers to finance based on the original purchase price of the property rather than today's appraised value. This helps buyers whose units have dropped in value since they bought. Qualifying criteria are strict.
Can I get a mortgage if I'm self employed with only one year of business?
Yes, but typically through an alternative lender, not a major bank. The strategy is to bridge for one to two years with an alternative lender, then refinance into a major bank once you have a two year financial track record.
What is the net worth program at Canadian banks?
Some major Canadian banks allow buyers to qualify for a larger mortgage by demonstrating liquid assets like RSPs or non-registered investments. You typically need to prove you've held the assets for at least 12 months.
Does RIF income qualify for a mortgage?
Yes. Retirement income from a RIF (Registered Retirement Income Fund) is recognized by lenders for mortgage qualification.
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