When the headlines say rates went up or down, what actually changed, and which of your numbers does it touch? Here is the plain-language version, with no jargon left unexplained.
People often blend the Bank of Canada's rate and bond yields into one idea. They are separate, and they drive different parts of your mortgage.
The Bank of Canada sets the overnight policy rate. Lenders set their Prime rate from it, and variable-rate mortgages and home equity lines of credit are priced off Prime. So when the Bank of Canada changes its rate, variable payments and lines of credit tend to move with it.
Fixed mortgage rates do not follow the Bank of Canada rate directly. They track Government of Canada bond yields, especially the terms that match common mortgage lengths, such as the 3, 5, 7, and 10-year. When those yields rise or fall, fixed rates generally follow over time.
Two more benchmarks shape commercial and multi-unit financing. Canada Mortgage Bond (CMB) yields are a key reference for CMHC-insured and apartment lending. CORRA, Canada's risk-free benchmark, increasingly underpins floating-rate commercial and construction loans. If you are financing income property or a build, these are the numbers to watch.
The Consumer Price Index, or CPI, measures inflation. It is the main thing the Bank of Canada watches. When inflation runs hot, the Bank tends to hold or raise; when it cools, the Bank has room to ease. So today's inflation reading is a clue to where rates may head, and through them, where your borrowing costs may head.
Tell us what you are planning, a purchase, renewal, refinance, or build, and we will walk through what today's rates mean for you.
Start a conversationInformation here is general and educational. It is not financial, legal, or lending advice, and it is not an offer of financing. We are mortgage brokers. Any rates or benchmarks referenced are for illustrative purposes only and are subject to change without notice. A benchmark rate is not a rate you are offered. All financing is subject to lender review, property review, and supporting documentation.