Bank of Canada Interest Rate Announcement — January 28, 2026 Update
Ottawa, Jan. 28, 2026 — In its first major announcement of the year, the Bank of Canada (BoC) has chosen to hold its key policy interest rate at 2.25%. This outcome was widely anticipated by economists and reflected in market pricing leading into today’s release.
What the Bank of Canada Decided
At its January 28 decision, the Bank of Canada decided to keep its benchmark overnight lending rate unchanged at 2.25%. The move comes amid ongoing uncertainty in global trade and economic forecasts, with inflation remaining reasonably close to the Bank’s 2% target.
Bank Governor Tiff Macklem and the Governing Council emphasized that while current monetary conditions support stable inflation and moderate growth, unpredictable factors — especially trade tensions — make future rate changes harder to forecast.
This marks the second consecutive policy decision in which the BoC held the rate steady, following a cycle of cuts throughout 2025.
What This Means for Borrowers
1. Prime Lending Rate Remains Stable
The prime rate in Canada — which most major banks use as the baseline for pricing variable-rate financial products — remains at 4.45%. This rate moves in lockstep with the Bank of Canada’s policy rate and is what variable-rate mortgages, lines of credit, and personal loans are often pegged to.
2. Variable Mortgage Rates
Because prime remains unchanged, variable-rate mortgage holders will see no immediate change to their interest costs as a result of this announcement. That means monthly payments tied to prime should continue at current levels until the BoC adjusts its policy rate.
3. What’s Next?
The Bank of Canada’s next scheduled interest rate decision will be March 18, 2026. Markets will be watching for any shifts in guidance — especially if inflation or economic growth data diverges from expectations.
Why the Bank Held Rates
Economists point to several factors influencing today’s hold decision:
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Inflation has been broadly in or near target ranges without sharp acceleration.
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The economic outlook remains mixed, with trade uncertainty weighing on key sectors.
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Recent data suggests growth is moderate, not requiring immediate tightening or easing.
Overall, this announcement signals a period of rate stability for borrowers and markets alike — at least for the first quarter of 2026.
If you want help understanding what this rate decision means for your new home purchasing plans, feel free to reach out. I have some great recommendations for mortage brokers and lenders.
Adrienne McGarvey
403.801.2012 (call or text)
adrienne.mcgarvey@2percentrealty.ca
