On January 28, 2026, the Bank of Canada held the overnight rate at 2.25%, marking another pause after earlier easing. There were no new cuts, but just as importantly, no hikes either.
That matters because rate stability gives buyers, sellers, and homeowners clarity after months of uncertainty. Variable-rate mortgages and HELOCs remain unchanged, while fixed rates continue to be driven primarily by the bond market, which has already priced in a slower, more cautious economic outlook.
Example: $1,000,000 Property with an $800,000 Mortgage (30-year amortization)
Since rates are being held, we’re comparing current common pricing scenarios rather than drops:
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Fixed Rate: ~4.25%
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Variable Rate: ~3.75%
Quick reference — payment per $100,000 (30 years):
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4.25%: ~$491.77/mo
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3.75%: ~$463.12/mo
Difference between fixed and variable: about $29/month per $100K
What That Means on an $800,000 Mortgage
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At 4.25% (fixed): about $3,934/month
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At 3.75% (variable): about $3,705/month
Difference: ~$229/month (≈ $2,750/year)
This isn’t savings from a rate cut — it’s the cost difference buyers are choosing between fixed and variable today, now that rates have stabilized.
Why a Rate Hold Still Matters Even without a cut, a hold has real implications:
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Borrowing costs are not increasing
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Buyers can plan without fear of sudden hikes
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Lenders and bond markets can price mortgages with more confidence
In many cases, certainty itself improves affordability, especially for buyers who were waiting on the sidelines.
Hidden Benefit: Predictable Principal Paydown
Stable rates also mean predictable equity growth.
Here’s a first-month snapshot on an $800,000 mortgage (30 years):
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4.25%: payment ~$3,934 → ~$2,833 interest + ~$1,101 principal
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3.75%: payment ~$3,705 → ~$2,500 interest + ~$1,205 principal
That’s ~$104 more going to principal each month with a lower-rate option — even without any new cuts.
In plain English: stable or slightly lower rates mean less uncertainty and faster equity building.
What This Means for Buyers Entering the Market Now
A rate hold creates a window of opportunity:
Stable payments
No surprise increases means buyers can confidently budget and qualify.
Stress test clarity
With contract rates holding, qualifying at contract + 2% becomes more predictable.
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Choice matters more than timing
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Instead of waiting for cuts, buyers can focus on:
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Fixed vs variable strategy
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Term length
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Purchase price and lifestyle fit
If you were waiting “just in case rates went up,” this announcement removes that risk — for now.
What About HELOCs and Variable Lines of Credit?
Because the Bank of Canada held the overnight rate:
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Prime remains unchanged
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HELOC and variable LOC payments stay the same
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No increase in carrying costs
For planning purposes:
Every $100,000 on a line of credit still costs roughly $312–$333/month in interest at today’s rates — and importantly, that number isn’t rising.
Fixed vs Variable — How to Think About It in 2026
Fixed-rate mortgages
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Payment certainty
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Best for risk-averse borrowers
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You lock in today’s pricing, not future cuts
Variable-rate mortgages & HELOCs
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Lower starting rate in many cases
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Benefit first if cuts resume later
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Slightly more risk, but currently stable
Many buyers are choosing shorter fixed terms (1–3 years) or discounted variables, positioning themselves for flexibility if easing resumes later this year.
The Bottom Line
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Rates are on hold, not rising
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Borrowing costs are stable
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About $229/month difference between common fixed and variable options on an $800K mortgage
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Principal paydown remains strong at today’s rates
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HELOC users avoid higher payments — for now