Canada Bank Interest Rates 2026: BoC Rate & Savings Guide

If you’ve checked your savings account or mortgage statement lately, you’ve probably noticed that Canada’s interest rate landscape has shifted. The Bank of Canada now sets its policy rate at 2.25%, and while that’s lower than the 2023 peaks, it still sits well above the emergency lows of 2020.

Current Bank of Canada interest rate: 2.25% (May 2026) ·
Next rate announcement date: June 10, 2026 ·
Typical 5-year fixed mortgage rate: 4.99% – 5.49% ·
Highest savings account APY available: Up to 7.1% ·
Annual interest on $100,000 at top savings rate: Up to $7,100 ·
Monthly payment on $500,000 mortgage at 5%: Approximately $2,900

The table below compares how each rate tier connects to consumer finances.

What is the Bank of Canada interest rate right now?

Current rate 2.25% (May 2026)

• The Bank of Canada policy interest rate stands at 2.25% as of the April 29, 2026 announcement (Bank of Canada (Canada’s central bank)). That’s the third successive hold this year after 11 consecutive cuts through 2024-2025.

How the overnight rate works

• The Bank adjusts the overnight rate on eight fixed dates per year — 2026’s schedule includes January 28, March 18, April 29, June 10, July 15, September 2, October 28, and December 9 (Bank of Canada (official publications schedule)). The rate influences almost every consumer borrowing and saving rate in Canada.

Where to check the official rate

• The most reliable source is the Bank of Canada’s own website, which posts each decision at 10 a.m. ET on announcement days. Third-party trackers like Trading Economics (financial data provider) also display current and historical rates.

What this means: At 2.25%, the BoC rate is roughly half its 2023 peak but still high enough to keep mortgage and variable-rate borrowing notably more expensive than the historic lows of 2020. The next move — up or down — depends on how inflation and the job market evolve.

Which bank gives the highest interest on savings accounts?

Top savings account rates in Canada (up to 7.1%)

• Several Canadian banks and credit unions are offering promotional savings rates as high as 7.1% APY as of May 2026 (WOWA.ca (Canadian rate comparison site)). These are typically limited-time offers that require a linked chequing account or regular direct deposit.

Banks offering 5% or more on regular savings

• Money-saving comparison sites list regular savings accounts earning between 5% and 6% from institutions like EQ Bank, Wealthsimple, and several credit unions. However, the 7.1% top rate often comes with conditions — minimum deposits or capped balances.

Conditions for high-rate savings accounts

• Most high-rate savings accounts require either a monthly direct deposit of $1,000+ or a balance cap of $5,000-$10,000 to earn the promotional rate. Always check the fine print: the high rate might apply only to the first few months.

The trade-off: Canadian savers can earn up to 7.1% right now, but that rate is rarely permanent. If you’re chasing yield, lock in a GIC for a guaranteed rate or be prepared to switch accounts when the promotion ends.

What is the current 5 year mortgage rate in Canada?

Typical 5-year fixed mortgage rates today

• As of late May 2026, the average 5-year fixed mortgage rate in Canada ranges from 4.99% to 5.49%, depending on the lender and whether you’re insured or uninsured (RBC Royal Bank (major Canadian bank)).

TD Canada Trust and RBC posted rates

• RBC’s posted 5-year fixed rate is around 5.34%, while TD’s is similar — though most borrowers negotiate discounts off posted rates. The RBC Prime Rate sits at 4.450% (RBC Royal Bank (prime rate page)).

How prime rate influences mortgage costs

• Variable-rate mortgages are directly tied to the prime rate, which moves in sync with the Bank of Canada overnight rate. When the overnight rate changes, prime follows within hours, and variable monthly payments adjust accordingly.

Why this matters: At current fixed rates near 5%, a $500,000 mortgage costs about $2,900 per month on a 25-year amortization. That’s roughly $800 more than the same mortgage would have cost in early 2022.

How much interest does $100,000 earn in a year?

Earnings at top savings rates (up to $7,100)

• If you deposit $100,000 into a savings account earning 7.1% APY, you’d earn $7,100 in one year before taxes (WOWA.ca (savings rate tracker)). Even at the more common 5% rate, the annual interest is $5,000.

Comparison with GICs and bonds

• One-year GICs currently offer between 3.5% and 4.5%, so a $100,000 GIC would yield $3,500–$4,500 — significantly less than the best savings accounts. Bonds yield even lower, around 3% for Canadian government 1-year notes.

Impact of compounding and taxes

• Compound interest matters: daily or monthly compounding adds about 0.1%–0.2% to the effective annual yield. But remember, interest income is fully taxable at your marginal rate, so a high earner in Ontario could lose ~40% of that interest to taxes.

The catch: $7,100 sounds great on paper, but after inflation (currently 2.4%) and taxes, the real return may be closer to 2–3% for someone in a moderate tax bracket. Still, it beats leaving cash in a 0.1% chequing account.

How much is a mortgage on a $500,000 house in Canada?

Monthly payment estimates at current rates

• For a $500,000 home with a 20% down payment ($100,000) and a $400,000 mortgage at 5% fixed over 25 years, the monthly payment is approximately $2,332. With a 5% down payment ($25,000) and $475,000 mortgage, the payment rises to about $2,769 (Trading Economics (mortgage cost data)).

Cost breakdown (principal, interest, taxes)

• At 5% interest, roughly 60% of the first year’s payments go to interest. Add property taxes (~$300/month average) and you’re at around $3,000+ total monthly housing cost.

Using nesto mortgage calculator results

• Online calculators like nesto.ca provide detailed breakdowns including CMHC insurance costs if your down payment is under 20%. For a $500k purchase with 10% down, CMHC premiums add about $10,000 to the mortgage amount.

The pattern: Even with rates off the 2023 highs, a typical $500,000 home still costs $3,000 per month all-in. That’s about 45% of the median full-time income in Canada, well above the 30% guideline many lenders use.

Will mortgage rates ever be 3% again?

Historical context: rates were below 3% in 2020-2021

• During the pandemic, 5-year fixed rates dipped as low as 1.5% to 2%. That period was the lowest in history, driven by the Bank of Canada cutting its overnight rate to 0.25%.

Economic forecasts and expert opinions

• Most analysts, including those at the Bank of Canada, do not forecast a return to 3% mortgage rates in the near term. The BoC’s own press conference language calls the rate path “no risk-free path” (Bank of Canada press conference (Governor Macklem statement)).

What would need to happen for rates to drop to 3%

• For mortgage rates to fall to 3%, the BoC overnight rate would need to return to around 0.5%–1.0%, which would require a major economic downturn or deflation — neither of which is in current forecasts. The market projects rates staying near 2.25% through late 2026 (WOWA.ca (rate forecast site)).

The implication: If you’re waiting for 3% mortgages to come back, you might be waiting years — if they ever return. The more realistic scenario is rates hovering between 4% and 5% for the foreseeable future.

When is the next Bank of Canada interest rate announcement?

2026 announcement schedule

• The next scheduled announcement is June 10, 2026. The full 2026 schedule includes eight dates: January 28, March 18, April 29, June 10, July 15, September 2, October 28, and December 9 (Bank of Canada (announcement calendar)).

How to track rate changes

• The Bank of Canada releases its decision at 10 a.m. ET on announcement day, followed by a press conference at 10:30 a.m. Major news outlets and financial sites like TD Stories (bank’s economic analysis) recap the decision within minutes.

Expected timeline for future decisions

• Scotiabank economics noted that the April 29 hold was expected and that markets are pricing additional holds through the summer before any potential cut in September (Trading Economics (market pricing)).

What to watch: The June 10 decision will be closely watched for any shift in language around inflation, especially after CPI rose to 2.4% in March. That single number could tip the balance toward a cut or a hold.

Key quotes on Canada’s interest rate outlook

“The Bank carries out monetary policy by influencing short-term interest rates.”

— Bank of Canada official policy statement (Bank of Canada)

“The central bank’s latest rate decision on April 29 was to hold its overnight lending rate at 2.25%.”

— Scotiabank Economics (TD Stories citing Scotiabank)

“Interest Rate in Canada is expected to be 2.25 percent by the end of this quarter.”

— Trading Economics forecast model (Trading Economics)

“There is no risk-free path for the policy interest rate.”

— Governor Tiff Macklem, Bank of Canada press conference (BoC YouTube)

For Canadian savers, the current environment offers rare high returns — but those rates are fragile and often short-lived. For mortgage holders, the cost of borrowing remains elevated and unlikely to drop dramatically soon. The choice is clear: lock in fixed rates now if you value predictability, or keep a variable if you’re betting on further cuts later this year. Savers and borrowers alike face a June 10 decision that will set the tone for the rest of 2026.

Related reading: **Canada Bank Interest Rates 2026: BoC, Mortgage & Savings** · **Bank of Canada Interest Rate History – Full Timeline and Key Insights**

For the latest on the central bank’s decision, see the detailed Bank of Canada interest rate announcement which covers the reasoning behind the hold.

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