The Bank of Canada's overnight-rate target was 2.25% after its July 15, 2026 decision. Variable mortgage pricing is more directly connected to lender prime rates; fixed mortgage pricing is influenced by bond-market funding and lender strategy. Most new uninsured mortgages at federally regulated lenders are qualified at the greater of the contract rate plus two percentage points or 5.25%.
Key facts
- The overnight-rate target was 2.25% after the July 15, 2026 announcement.
- OSFI's current uninsured-mortgage minimum qualifying rate is the greater of contract rate plus 2% or 5.25%.
- OSFI describes a straight-switch exception at renewal when the uninsured loan amount and amortization do not increase, subject to the applicable conditions.
Policy rate is not mortgage quote
The overnight target influences financial conditions, but lenders set products using funding costs, bond yields, credit risk, term, product features, competition, and borrower circumstances. A headline rate should not replace a written quote.
Payment and qualification are different
The contract rate determines the scheduled mortgage payment. The qualifying rate is a lender underwriting test. A buyer can face a higher qualification rate even when the offered payment rate is lower.
The decision file
Record the offered rate, term, fixed or variable structure, payment frequency, prepayment rules, penalties, qualification assumption, renewal stress rate, and expiry date. Re-run affordability when any of them changes.
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