Bank of Canada Interest Rate History, 2021 to 2026
The Bank of Canada’s target for the overnight rate has held at 2.25% since 30 October 2025, the end point of nine straight cuts from a 5.00% peak. The next scheduled decision is 28 October 2026, so this level has a short shelf life from the date you are reading it. Check pekoe.ca/rates or the Bank of Canada directly for what is live today.
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What is the Bank of Canada’s target for the overnight rate right now?
The Bank of Canada’s target for the overnight rate is 2.25%, unchanged since 30 October 2025 and unchanged through the latest observation on 20 October 2026. The next scheduled decision is 28 October 2026, with a Monetary Policy Report. Check pekoe.ca/rates or the Bank of Canada directly if you are reading this later.
This page tracks the Bank’s target for the overnight rate using the Bank of Canada’s own Valet API, series V39079. Every date in the history below is an effective date, the day a new target took hold, not the day it was announced.
The Bank changes this rate at most eight times a year, on its own fixed schedule. A level that is accurate today stops being current the moment the Bank meets again, which is why the pattern below matters more than the single number at the top of this page.
The citable fact: the Bank of Canada’s target for the overnight rate was 2.25% at its last observation on 20 October 2026, unchanged since 30 October 2025, with its next scheduled decision on 28 October 2026.
What exactly is the overnight rate, and why does the Bank set a target for it?
The overnight rate is the interest rate banks use to lend each other money for one business day. The Bank of Canada sets a target for that rate eight times a year on scheduled decision dates, and that target then ripples through borrowing costs across the whole financial system, mortgages included.
Banks settle balances with each other every business day, and some end up short while others end up with extra cash. The overnight market is where that borrowing happens, and the Bank of Canada’s target is the level it wants that market to land on.
The Bank steers the actual market rate toward its target through its own operations with the financial system. From there the effect spreads outward, first to the rates banks charge each other, then to the rates they charge everyone else.
The citable fact: the Bank of Canada’s target for the overnight rate is a policy tool, set on up to eight scheduled dates a year, that anchors the cost of short-term borrowing throughout the Canadian financial system.
How has the Bank of Canada’s policy rate changed since 2021?
Effective 1 January 2021 the target sat at 0.25%. It rose in ten steps to 5.00% by 13 July 2023, held there for almost a year, then fell in nine steps to 2.25% effective 30 October 2025, where it remains through the latest 20 October 2026 observation.
The chart and table below show every effective change the Bank of Canada’s Valet API records across this window. Source: Bank of Canada, Valet API, series V39079, target for the overnight rate, business daily.
| Effective date | Target | Move |
|---|---|---|
| 2021-01-01 | 0.25% | Window start |
| 2022-03-03 | 0.50% | +25 bps |
| 2022-04-14 | 1.00% | +50 bps |
| 2022-06-02 | 1.50% | +50 bps |
| 2022-07-14 | 2.50% | +100 bps |
| 2022-09-08 | 3.25% | +75 bps |
| 2022-10-27 | 3.75% | +50 bps |
| 2022-12-08 | 4.25% | +50 bps |
| 2023-01-26 | 4.50% | +25 bps |
| 2023-06-08 | 4.75% | +25 bps |
| 2023-07-13 | 5.00% | +25 bps |
| 2024-06-06 | 4.75% | -25 bps |
| 2024-07-25 | 4.50% | -25 bps |
| 2024-09-05 | 4.25% | -25 bps |
| 2024-10-24 | 3.75% | -50 bps |
| 2024-12-12 | 3.25% | -50 bps |
| 2025-01-30 | 3.00% | -25 bps |
| 2025-03-13 | 2.75% | -25 bps |
| 2025-09-18 | 2.50% | -25 bps |
| 2025-10-30 | 2.25% | -25 bps |
The citable fact: since 1 January 2021 the Bank of Canada’s target for the overnight rate has moved through 19 effective changes, from a low of 0.25% to a high of 5.00%, and currently sits at 2.25%.
Why did the policy rate rise so sharply in 2022 and 2023?
The Bank raised its target rapidly through 2022 and into mid-2023 to cool inflation that had climbed well above its target range. Ten increases in just over sixteen months took the rate from 0.25% to 5.00%, one of the fastest tightening cycles in the Bank’s modern history.
Higher borrowing costs are the Bank’s main tool for slowing an overheated economy. Raising the target rate makes loans, mortgages and credit more expensive across the board, which is meant to cool spending and bring inflation back toward target.
The pace in 2022 stands out in the table above: four increases of 50 basis points or more in a single year, including a 100-point jump on 14 July 2022. That speed reflected how far inflation had moved from where the Bank wanted it.
The citable fact: the Bank of Canada raised its target rate ten times between March 2022 and July 2023, taking it from 0.25% to a cycle peak of 5.00%.
Why has the policy rate fallen since mid-2024?
Starting 6 June 2024 the Bank cut its target in nine moves, from 5.00% down to 2.25% effective 30 October 2025. The cuts reflect inflation cooling back toward target and a softening economy, and the rate has now held unchanged for close to a year, through the October 2026 observations.
Once inflation eased enough for the Bank to judge its job largely done, it began reversing course. Each cut lowers the cost of new and renewing variable-rate debt, which is meant to support growth once the inflation fight is no longer the priority.
The easing cycle included two 50-basis-point cuts back to back, on 24 October and 12 December 2024, before slowing to smaller 25-point moves through 2025. The rate has not moved since the 30 October 2025 cut to 2.25%.
The citable fact: the Bank of Canada cut its target rate nine times between June 2024 and October 2025, from 5.00% to 2.25%, where it has stayed through the latest 2026 observations.
Does the Bank of Canada’s rate set my mortgage rate?
No. The Bank of Canada’s target rate sets the cost of overnight funding between banks, which drives the prime rate that banks publish on their own schedule. Prime then prices variable-rate mortgages and home equity lines of credit, but it does not set fixed mortgage rates, which follow a different market entirely.
This is one of the most misunderstood points in mortgage news coverage. A headline that says the Bank of Canada held its rate does not mean your specific mortgage rate held, and a cut does not automatically mean your fixed rate drops.
Two separate pricing systems sit downstream of the policy rate: one for variable-rate products, tied to bank prime rates, and one for fixed-rate products, tied to the bond market. The next two sections cover each one.
The citable fact: the Bank of Canada’s target for the overnight rate is not a mortgage rate. It influences prime, which prices variable-rate products, while fixed mortgage rates are priced independently off the bond market.
How does the policy rate flow through to a variable-rate mortgage or a HELOC?
When the Bank moves its target, lenders typically adjust their prime rate within days, and that adjustment flows directly into every variable-rate mortgage and HELOC payment priced off prime. A variable-rate borrower feels a Bank of Canada decision almost immediately, while a fixed-rate borrower feels nothing until their term renews.
Each bank sets its own prime rate, and in practice the major lenders move together within a day or two of a Bank of Canada announcement. We do not publish a specific prime rate or spread on this page, because those figures move independently of this history and belong on a live rates page.
| Product | What moves its rate | Relationship to the policy rate |
|---|---|---|
| Variable-rate mortgage | Lender’s own prime rate | Prime typically adjusts within days of a target change |
| HELOC | Lender’s own prime rate | Same mechanism as a variable-rate mortgage |
| Fixed-rate mortgage | Government of Canada bond yields | Moves independently; can change on days the Bank does nothing |
| Mortgage qualifying rate | Contract rate plus a regulatory floor | Set by OSFI and the default insurers, not directly by the target |
Check pekoe.ca/rates for current pricing on variable and fixed products, updated daily rather than tied to any single Bank of Canada announcement.
The citable fact: variable-rate mortgages and HELOCs are priced off each lender’s prime rate, and prime moves in response to Bank of Canada target changes, usually within days of the announcement.
Why do fixed mortgage rates move even when the Bank of Canada does nothing?
Fixed mortgage rates are priced off the bond market, specifically Government of Canada bond yields, not the Bank of Canada’s overnight rate target. Bond yields move daily on inflation data, economic growth expectations and global market sentiment, which is why fixed pricing can shift on a day the Bank makes no announcement at all.
Lenders fund fixed-rate mortgages largely through the bond market, so their pricing tracks Government of Canada bond yields rather than the overnight rate. Yields react to new economic data, inflation reports and global events on essentially any business day.
That is why a borrower can see fixed pricing shift the week of a jobs report or a large inflation print, with no Bank of Canada meeting anywhere near that date. We do not state a specific yield or fixed rate on this page, because both change too often to publish responsibly here.
The citable fact: fixed mortgage rates follow Government of Canada bond yields, which move daily on economic data, so fixed pricing can change on days the Bank of Canada makes no decision at all.
When is the Bank of Canada’s next rate decision, and what happens at it?
The Bank’s next scheduled decision is 28 October 2026, one of eight fixed dates a year, and this one comes with a full Monetary Policy Report setting out the Bank’s economic outlook. The Bank can hold, raise or cut its target that day, and the decision is published on its own website the same morning.
The Bank of Canada publishes its decision schedule well in advance at bankofcanada.ca/press/upcoming-events. Four of the eight yearly dates, including the 28 October 2026 decision, carry a full Monetary Policy Report rather than the shorter rate statement alone.
A Monetary Policy Report sets out the Bank’s reading of inflation, growth and the risks it is watching, which usually explains the reasoning behind the rate decision in more depth than a short statement allows.
The citable fact: the Bank of Canada’s next scheduled interest rate decision is 28 October 2026, accompanied by a Monetary Policy Report.
What does this rate history mean for borrowers in Ontario and Alberta?
The Bank of Canada’s target rate is federal and identical for every borrower in Ontario and Alberta. What differs is who regulates the broker helping you use that rate: Ontario brokerages operate under FSRA licensing requirements, while Alberta brokerages are licensed by RECA, with separate rules, complaint routes and disclosure obligations in each province.
Nothing in the history above changes by province. A 2.25% target on 20 October 2026 applies equally in Kitchener-Waterloo and in Canmore, because the Bank of Canada sets one rate for the whole country.
What does change by province is the regulatory framework around the broker you work with, and some of the closing costs layered on top of a mortgage. Pekoe operates in both provinces under two separate licences.
| Item | Ontario | Alberta |
|---|---|---|
| Regulator | FSRA, the Financial Services Regulatory Authority of Ontario | RECA, the Real Estate Council of Alberta |
| Pekoe’s licence | FSRA Brokerage Licence #13321 | Licensed by RECA |
| Provincial land transfer tax | Applies, on top of any municipal tax a city adds | None; title registration fees only |
| Default enforcement | Power of sale | Judicial foreclosure |
The citable fact: the Bank of Canada’s target rate applies identically in Ontario and Alberta, while the mortgage brokers arranging financing against that rate are regulated separately, by FSRA in Ontario and RECA in Alberta.
How should I use this history when thinking about a renewal or a purchase?
Use the direction of the last several decisions, not a single snapshot, when thinking about timing. A borrower weighing variable against fixed, or deciding whether to lock in at renewal, should talk to a licensed broker about their specific file rather than guess from a chart, because no page can replace a review of your actual numbers.
The table above is a record, not a forecast. We do not predict where the target goes after 28 October 2026, and any page that tells you with confidence is guessing.
If your mortgage is maturing in this environment, the history matters most for understanding why your renewal offer looks the way it does, not for timing a bet against your lender. Our Renewal Negotiation Playbook course walks through how to read a renewal offer and negotiate it using exactly this kind of rate context, rather than accepting the first number your lender sends.
The citable fact: a rate history explains how pricing got to where it is, but it is not a substitute for a licensed broker reviewing your specific mortgage file before a purchase or a renewal decision.
Where else can I check how a rate decision affects my specific mortgage?
These related pages cover the pieces this history connects to: qualifying, renewal timing and what happens if you do nothing at renewal.
- How the mortgage stress test works, separate from the policy rate
- Calculate your own renewal payment shock
- What happens if you do nothing at mortgage renewal
The full set lives on the Ask a Broker hub.
Frequently asked questions
Is the Bank of Canada’s interest rate the same as my mortgage rate?
No. The Bank of Canada sets a target for the overnight rate, which influences the prime rate that drives variable-rate mortgages and HELOCs. Fixed mortgage rates are priced separately, off Government of Canada bond yields, so the two can move in different directions.
How often does the Bank of Canada change its interest rate?
The Bank announces a rate decision on up to eight scheduled dates a year. It can hold its target unchanged at any of those meetings, as it has done at every meeting since 30 October 2025.
What is the highest the Bank of Canada’s rate has been since 2021?
The target peaked at 5.00%, effective 13 July 2023, after a series of increases that began in March 2022. It held at that level for almost a year before the Bank started cutting in June 2024.
What is the lowest the rate has been since 2021?
The target opened the period at 0.25% on 1 January 2021 and stayed there until the first increase on 3 March 2022. That remains the low point of the full window this page covers.
How fast do banks change prime after a Bank of Canada decision?
Lenders typically move their published prime rate within a day or two of a Bank of Canada decision. The exact timing and the size of the move are set by each lender, not by the Bank itself.
Do fixed mortgage rates ever follow the Bank of Canada’s decisions?
Only indirectly. Bond markets sometimes move in anticipation of a Bank of Canada decision, which can shift fixed pricing around the same time, but the direct driver remains the bond yield, not the Bank’s announcement itself.
Is the chat on this page a real person, or a bot?
A licensed Pekoe broker answers during business hours, live. Outside those hours your question is held and a licensed broker replies directly, with no AI persona standing in as an advisor.
Does the Bank of Canada’s target rate differ between Ontario and Alberta?
No. It is a single federal rate that applies identically across every province. What differs by province is the regulator overseeing the mortgage broker you work with, FSRA in Ontario and RECA in Alberta.
Where can I see today’s actual mortgage rates, not just the policy rate?
Current rates are posted at pekoe.ca/rates and updated daily, separate from this history page. You can also get a pre-approval certificate there in seconds.
What happens at a Bank of Canada decision that includes a Monetary Policy Report?
The Bank publishes its rate decision alongside a fuller account of its economic outlook, covering inflation, growth and risks it is watching. Four of the eight yearly decisions carry a full report, and the others are shorter rate statements.
Should I lock into a fixed rate because of where this history points?
This page describes what has already happened and how the mechanics work, not what the Bank will do next. Talk to a licensed broker about your specific file, your risk tolerance and your timeline before choosing between fixed and variable.
Want a licensed broker to translate this history into your numbers?
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