Rates Held at 2.25%: Eastern Ontario Housing Market

Quick answer: The Bank of Canada held its overnight rate target at 2.25% on September 2, 2026, and its next announcement is scheduled for October 28, 2026. A steady policy rate does not fix mortgage rates in place, but it removes one source of sudden change for people planning a purchase or a sale in Eastern Ontario. Published board statistics from the Canadian Real Estate Association (CREA) show that local markets are moving at different speeds, so the effect of a steady rate differs between Ottawa and the Leeds and Grenville, Lanark and Dundas area.

In This Article

• What the Bank of Canada decided on September 2
• Policy rate versus mortgage rate
• What a quarter point means for a monthly payment
• What two local board reports show
• How a steady rate affects buyers
• How a steady rate affects sellers
• What October 28 is, and what is not yet known
• Planning checklist
• Frequently asked questions
• Related reading

What the Bank of Canada Decided on September 2

On September 2, 2026, the Bank of Canada held its overnight rate target at 2.25%. The Bank Rate stayed at 2.5% and the deposit rate at 2.20%. The decision continued a period in which the policy rate has not changed, and the Bank's published statement gave several reasons for holding.

On the economy, the Bank reported that second-quarter GDP grew 3.3% after a very weak first quarter. The unemployment rate fell to 6.4% in July, although the Bank noted that labour demand remains subdued and that the economy still has excess supply. On housing, the statement said activity rebounded somewhat after several weak quarters.

On inflation, the Bank said consumer price inflation has been near 3%, mainly because of higher gasoline prices. Excluding gasoline, inflation was 2.2% in July, and the Bank's core measures stayed close to 2%. The Bank also said it sees increased upside risk to its inflation forecast. It listed the conflict in the Middle East, high oil prices, new United States tariffs and Canadian counter-measures as sources of uncertainty, and stated that it is prepared to adjust monetary policy as needed.

Two points matter for readers. First, a hold is a decision, not an absence of one, and the Bank has stated that it can move in either direction when the data change. Second, the Bank's own wording does not commit to a future rate. Any statement that a rate cut or increase is certain at a particular meeting is a forecast by the person making it, not a position of the Bank.

Policy Rate Versus Mortgage Rate

The overnight rate is the rate at which major financial institutions lend to one another for one day. It is not the rate printed on a mortgage commitment. Lenders set mortgage rates using their own funding costs, competition, the term of the mortgage and the risk of the borrower. The policy rate influences those costs, but the link differs by product.

Variable-rate and adjustable-rate mortgages are usually tied to a lender's prime rate, and lenders generally adjust prime after a change in the policy rate. A held policy rate therefore tends to leave those borrowers' rates unchanged between decisions. Fixed-rate mortgages follow a different pattern. They are generally priced from bond market yields for matching terms, and those yields move daily with expectations about the economy and inflation. A fixed rate can change even when the policy rate has not moved at all.

This distinction explains why a hold does not mean mortgage quotes stay the same. A buyer comparing a five-year fixed quote today with one from a month ago may see a difference even though the overnight rate is unchanged. A buyer with a variable-rate mortgage, by contrast, would typically see no change in the rate until the lender adjusts prime.

Qualification rules add another layer. Lenders must test whether a borrower can carry a mortgage at a rate above the contract rate, and the specific test depends on whether the mortgage is insured or uninsured and on the lender. A buyer's pre-approval amount can therefore change for reasons unrelated to the overnight rate. A written pre-approval from a lender, with its expiry date and rate hold period, is the document that sets out the actual terms available to that buyer.

What a Quarter Point Means for a Monthly Payment

Rate changes become easier to judge when they are converted into monthly dollars. The table below shows arithmetic examples for a $500,000 mortgage with a 25-year amortization, calculated with semi-annual compounding, the convention used for Canadian fixed-rate mortgages. The rates shown are illustrations chosen to show the effect of small changes. They are not current quotes from any lender.

Two things stand out in these figures. A quarter-point change on this loan amount moves the payment by roughly $68 a month, which is $816 over a year. A full one-point change moves it by $278 a month, or $3,336 over a year. Those amounts are meaningful for a household budget, but they are also small relative to the effect of a change in the purchase price or the down payment. For many buyers, the loan amount matters more to the monthly payment than a small rate difference.

The examples also show why a steady policy rate supports planning. When rates are not changing between meetings, a buyer can compare a monthly payment today with a monthly payment at closing with less uncertainty, particularly if a lender has provided a rate hold. A rate hold is a lender commitment to offer a stated rate for a stated period, usually on a pre-approval, and its terms are specific to each lender.

What Two Local Board Reports Show

Rates are one input. Local supply and sales volume are another, and they differ across Eastern Ontario. CREA publishes monthly statistics for each member board, and two of those reports cover much of the region this article addresses. The two reports cover different months, so they should be read side by side for context and not as a same-month comparison.

Ottawa Real Estate Board, July 2026. CREA reports 1,325 actual sales, essentially unchanged from July 2025 (up 0.2%). The average sale price was $683,308, down 1.6% from a year earlier. New listings were 2,530, down 0.8%. Active listings were 4,678, up 9.3% year over year. Months of inventory, the time it would take to sell current active listings at the current sales pace, was 3.5, compared with 3.2 a year earlier. The MLS Home Price Index benchmark price for a single-family home was $725,000, up 0.7% year over year.

Rideau-St. Lawrence Real Estate Board, August 2026. This board covers Leeds and Grenville, Lanark and part of Dundas. CREA reports 241 actual sales and 501 new listings for the month, with 1,255 active listings. The average sale price was $566,451 and the single-family benchmark price was $558,200. Months of inventory was 5.2.

Several observations follow from these published figures. First, months of inventory is higher in the Rideau-St. Lawrence area than in Ottawa. A higher figure generally indicates that buyers have more homes to choose from relative to the pace of sales, while a lower figure indicates a faster-moving market. Second, average price and benchmark price are different measures. The average reflects whichever homes happened to sell in the month, so it can rise or fall when the mix of sales changes. The benchmark is designed to track a typical home with fixed characteristics, which makes it less sensitive to that mix. Third, Ottawa's active listings rose while sales were flat, which is consistent with a market where inventory is building gradually and not one where it is draining.

These are board-wide figures. A rural property on a large lot, a village home and a suburban townhouse can behave quite differently within the same board, and a board average does not value any individual property. Readers interested in how the two boards compare in more detail can read this earlier look at rural Eastern Ontario prices across two board reports.

How a Steady Rate Affects Buyers

For buyers, the practical effect of a held policy rate is a more stable planning environment, not a guaranteed outcome. A buyer who has a pre-approval with a rate hold can estimate a closing payment with reasonable confidence for the length of that hold. A buyer without one is exposed to movement in fixed-rate pricing, which can occur between the Bank's meetings.

Rate is also only part of the cost of owning a home in the region. Property taxes, home insurance, heating, water and septic maintenance, and transportation costs vary by location and property type. A rural property may include a well, a septic system, a long driveway and outbuildings, each with its own maintenance profile. Buyers weighing a country property can find a cost framework in this discussion of what a buyer is actually paying for in a higher-priced home, and a due diligence framework in this guide to evaluating a country estate with acreage in Eastern Ontario.

Where inventory is higher, as the Rideau-St. Lawrence figures indicate, buyers may have more time to compare properties and complete inspections and financing conditions. Where inventory is lower, as in the Ottawa figures, timelines can be shorter. In either case, the conditions that apply to a specific offer, such as financing, inspection and a lawyer's review of the agreement, are set out in the agreement of purchase and sale and should be reviewed with a lawyer.

Buyers considering land in the Kemptville area can also review local context in this look at acreage for sale near Kemptville in North Grenville. Zoning, services and permitted uses are parcel-specific, and a buyer should confirm them with the municipality before relying on any assumption about a lot.

How a Steady Rate Affects Sellers

For sellers, buyer purchasing power is linked to financing costs, so a steady rate means that the financing environment buyers face is not shifting from week to week because of the policy rate. That does not determine how a specific home will be received. Condition, location, pricing relative to recent sales of similar properties, and the time of year all influence results.

The board data above suggests that sellers in different parts of the region face different conditions. A seller in an area with more months of inventory is competing with more active listings for the same pool of buyers. A seller in an area with fewer months of inventory faces less direct competition. In both cases, the most relevant evidence is recent sales of comparable properties nearby, which a licensed salesperson can review in a market evaluation. A board-wide average is not a substitute for that analysis.

Sellers should also consider that they are often buyers too. A seller moving within the region will face the same financing environment on the purchase side. Timing the sale and the purchase together, including whether to include a condition on the sale of an existing home, is a decision that depends on personal circumstances. Readers who want broader context on moving to or within the region can read this overview of living in Eastern Ontario.

What October 28 Is, and What Is Not Yet Known

The Bank of Canada's next policy rate announcement is scheduled for Wednesday, October 28, 2026, at 9:45 a.m. Eastern Time. The Bank has stated that a new Monetary Policy Report will be released the same day. That report contains the Bank's updated projections for growth and inflation, which is why the date draws more attention than an announcement without a report.

What is known before that date is limited. The Bank has said inflation near 3% is driven largely by gasoline prices, that inflation excluding gasoline was 2.2% in July, and that risks to its inflation forecast have increased. It has also said that housing activity rebounded somewhat and that the economy has excess supply. These statements point in different directions, and the Bank has not indicated which way it will move. Market commentators publish estimates of the odds of a hold or a change, but those are opinions about the future and not announcements.

For a household, the useful approach is to plan for a range. Buyers can ask a lender what the payment would be at the quoted rate and at a rate somewhat higher, using the same loan amount. Sellers can ask what the market evaluation looks like under current conditions and what they would do if conditions changed. Neither step requires predicting the Bank's decision.

Planning Checklist

• Obtain a written mortgage pre-approval and note its expiry date and rate hold period.
• Ask the lender for the monthly payment at the quoted rate and at a rate one full point higher.
• Confirm whether the mortgage is fixed or variable and how a policy rate change would affect it.
• Budget for property taxes, insurance, utilities and, for rural homes, well, septic and driveway maintenance.
• Review the most recent CREA board statistics for the specific board where the property is located.
• Ask a licensed salesperson for recent comparable sales within the same area and property type.
• Confirm zoning, services and permitted uses with the municipality for any parcel of land.
• Review financing, inspection and other conditions in the agreement of purchase and sale with a lawyer.
• Note the October 28, 2026 announcement and Monetary Policy Report date in the planning calendar.

FAQ

What is the Bank of Canada policy rate right now?

The Bank of Canada held its overnight rate target at 2.25% on September 2, 2026. The Bank Rate was 2.5% and the deposit rate was 2.20%. The next scheduled announcement is October 28, 2026.

Does a held policy rate mean mortgage rates stay the same?

Not necessarily. Variable-rate mortgages generally follow lender prime rates, which usually change after a policy rate change. Fixed-rate mortgages are generally priced from bond yields, which move daily, so fixed-rate quotes can change even when the policy rate does not.

How much does a quarter-point rate change affect a monthly payment?

In the arithmetic example used in this article, a $500,000 mortgage with a 25-year amortization has a payment of about $2,630 at 4.00% and about $2,698 at 4.25%, a difference of $68 a month. These are illustrations and not lender quotes, and actual payments depend on the lender, term and amortization.

Where can I find current statistics for my local board?

CREA publishes monthly statistics for each member board on its public statistics pages, including the Ottawa Real Estate Board and the Rideau-St. Lawrence Real Estate Board. A licensed salesperson can also provide recent comparable sales for a specific property, which is more specific than a board-wide figure.

Related Reading and Next Steps

Readers comparing regional conditions can continue with the articles linked above on board reports for rural Eastern Ontario, the costs inside a higher-priced home, acreage near Kemptville and living in Eastern Ontario. This article is general information, not mortgage, legal or financial advice, and a lender or financial advisor can provide guidance based on an individual's circumstances.

Those planning a purchase or sale in Eastern Ontario can speak with Deb Driscoll, Jaime Peca and Luke Geleynse of the Driscoll-Peca Team with REAL Brokerage, who can review local market conditions and recent comparable sales for a specific property and answer questions about the process.

Sources: Bank of Canada, press release on the policy interest rate, September 2, 2026; Canadian Real Estate Association, Ottawa Real Estate Board statistics, July 2026; Canadian Real Estate Association, Rideau-St. Lawrence Real Estate Board statistics, August 2026. Monthly payment figures are arithmetic examples calculated with semi-annual compounding and are not lender quotes.