Cost- Fixed mortgage rates moved up somewhat in spring 2026, even as the Bank of Canada's policy rate held steady at 2.25%.
- The move was driven by Government of Canada bond yields, which rose on trade and tariff-related uncertainty during that period.
- This illustrates a recurring disconnect: fixed rates track bond yields, not the policy rate directly, so the two can move in different directions at the same time.
Why bond yields moved on tariff and trade news
Government of Canada bond yields — the benchmark fixed mortgage rates are priced off — reflect investor expectations about future economic conditions and rates over the bond's term, not just where the Bank of Canada's policy rate sits today. Trade and tariff-related uncertainty in spring 2026 pushed those yields higher, as markets priced in a somewhat different economic outlook, even though the Bank of Canada's own policy rate stayed at 2.25% throughout the same period.
The recurring fixed-vs-policy-rate disconnect
This is a specific, real-world illustration of the broader point covered in our rate hold update: fixed and variable rates don't move in lockstep, because they're driven by fundamentally different mechanisms. Variable rates track the policy rate directly; fixed rates track bond yields, which respond to a much wider set of economic expectations, trade policy among them.
What it means for borrowers weighing fixed vs. variable
This episode is a useful, concrete reminder that "the Bank of Canada held rates" doesn't mean fixed rates are static too — they can move independently, in either direction, based on factors that have nothing to do with the central bank's own decisions. If you're timing a fixed-rate lock, watching bond yield trends is more directly relevant than watching Bank of Canada announcements alone. See our fixed vs. variable decision guide for the fuller picture.
- Bank of Canada — accessed September 2026