With rates widely forecast to hold, mortgage brokers face another quarter of renewal conversations with no clear relief
The Bank of Canada is expected to hold its overnight rate at 2.25 percent on Wednesday, marking a seventh consecutive rate hold. Forecasters and bond markets are in near-total agreement.
For mortgage brokers, that consensus brings no comfort. It prolongs a client conversation that has grown harder with each passing hold.
By the end of 2026, one-third of Canadian mortgage holders face higher monthly payments. Many took out mortgages at near-zero pandemic rates now coming due for renewal. Brokers are fielding those calls now.
Bank of Canada rate hold keeps renewal pressure building
Among those facing increases at renewal, roughly 75 percent hold five-year fixed-rate mortgages. Payment increases are expected to average around 20 percent.
That gives brokers a concrete starting point in renewal conversations. Clients who locked in at historically low rates in 2021 and 2022 are renewing into a very different environment. Even with a Bank of Canada rate hold in place, payments are going up.
Mortgage delinquency balances rose 32 percent year-over-year nationally in the first quarter of 2026. They rose 52 percent in Ontario, according to Equifax Canada's Q1 2026 Market Pulse report. Those numbers are already visible in broker pipelines.
Brokers advising on the fixed-versus-variable trade-off heading into autumn have limited room to manoeuvre. The hold removes one fear: an imminent rate increase. But it does not lower payments.
The forecaster split that changes broker advice
BMO, CIBC, RBC, and TD all forecast the policy rate at 2.25 percent through December 2026. National Bank and Scotiabank break from that view; both project the Bank will move to 2.50 percent in October and 2.75 percent before year-end.
That split matters for broker advice. A client choosing variable today is taking a different risk than six months ago.
DLCG chief economist Sherry Cooper said September will see the Bank hold again. A hike further down the line remains a real possibility.
Cooper pointed to decelerating wage growth and moderate energy prices as reasons the Bank would hold its tone Wednesday. But she cautioned that a strengthening economic backdrop could push it toward tightening if conditions persist.
Tariffs add a floor to the rate conversation
US President Donald Trump's $28 billion in Section 338 tariffs on selected Canadian goods took effect last month. Prime Minister Mark Carney responded with dollar-for-dollar retaliatory measures. Washington then threatened to double tariffs on Canadian vehicles and auto parts to 50 percent, starting January 1, 2027.
Rabobank expects the Bank of Canada to hold rates through 2027. Markets are currently pricing in around 17 basis points of tightening by year-end.
The tariff environment complicates advice on variable-rate products. A rate cut is off the table. A hike is possible, if unlikely this week.
A Bank of Canada rate hold at 2.25 percent means Canada's prime rate stays at 4.45 percent. The five-year variable rate at major brokers currently sits around 3.45 percent. That floor is where the client conversation starts.
