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Find a real estate broker →The Bank of Canada (BoC) lowered its policy rate to 2.75% on March 12, 2026, continuing the cutting cycle that began in June 2024. The next announcement is scheduled for April 29, 2026. For Quebec buyers and homeowners, every 0.25% change has a concrete impact on monthly mortgage payments. Here is our complete analysis of the situation and what you should prepare for.
📊 1. Current Policy Rate: 2.75%
2.75%
BoC policy rate (March 2026)
~3.20%
Average variable rate
~3.69%
Average 5-year fixed rate
The Bank of Canada’s policy rate sits at 2.75% since March 12, 2026. This represents a cumulative decrease of 2.25 percentage points from the peak of 5.00% reached in July 2023. This significant decline has translated into a notable improvement in affordability across the Quebec real estate market. The prime rate at major Canadian banks currently sits around 4.95%, which is 2.20 points above the policy rate.
For holders of variable-rate mortgages, the latest March cut immediately reduced their effective rate. For those considering a purchase, financing conditions are the most favorable since 2022. However, the key question is whether the BoC will continue cutting on April 29 or pause its cycle.
💡 Did you know? The policy rate directly influences the banks’ prime rate, which serves as the basis for calculating variable rates. Each 0.25% cut to the policy rate is generally passed through in full to the prime rate within days of the announcement.
📈 2. Rate Cut History 2024–2026
Since June 2024, the Bank of Canada has carried out a series of successive rate cuts to support the Canadian economy amid an economic slowdown. Here is the complete path of the policy rate:
| Date | Policy Rate | Change |
|---|---|---|
| July 2023 | 5.00% | Peak |
| June 2024 | 4.75% | -0.25% |
| July 2024 | 4.50% | -0.25% |
| September 2024 | 4.25% | -0.25% |
| October 2024 | 3.75% | -0.50% |
| December 2024 | 3.25% | -0.50% |
| January 2025 | 3.00% | -0.25% |
| March 2025 | 2.75% | -0.25% |
| April 2025 | 2.75% | Hold |
| June 2025 | 2.75% | Hold |
| January 2026 | 2.75% | Hold |
| March 2026 | 2.75% | Hold |
The cutting cycle totals 2.25 percentage points from the July 2023 peak. After aggressive cuts in late 2024, the BoC adopted a more cautious pace in 2025 and 2026, holding the rate at 2.75% since March 2025. Financial markets are divided on the April 29 decision: some anticipate a hold, while others expect an additional 0.25% cut.
💰 3. Impact on Variable Rate
The variable rate is directly linked to the Bank of Canada’s policy rate. Every 0.25% movement is reflected in your monthly payment. Here is the concrete impact for a typical Quebec mortgage:
Reference mortgage: $450,000, 25-year amortization
Current variable rate: ~3.20% (prime − 1.75%)
Current monthly payment: ~$2,184
If cut by −0.25%
−$56 / month
That’s −$672 / year
If cut by −0.50%
−$112 / month
That’s −$1,344 / year
For a $450,000 mortgage, each 0.25% policy rate cut saves approximately $56 per month, or $672 per year. Over the full duration of a 5-year term, a 0.25% cut represents total savings of approximately $3,360. Since the 5.00% peak in July 2023, variable rate holders have seen their payment decrease by approximately $504 per month, or over $6,000 per year.
To learn more about choosing between fixed and variable rates, read our article on fixed vs variable mortgage in 2026.
🏦 4. 5-Year Fixed Rate: Trend
Unlike the variable rate, the 5-year fixed rate is not directly tied to the policy rate. Instead, it depends on the yield of 5-year Government of Canada bonds, which reflects market expectations for the future economy. In April 2026, the 5-year fixed rate sits around 3.69%, down from the peak of ~5.50% reached in late 2023.
The spread between the fixed rate (3.69%) and the variable rate (3.20%) is currently 0.49 percentage points. Historically, the variable rate offers an advantage over the long term in approximately 80% of 5-year periods. However, the fixed rate provides the security of stable payments, which can be valuable in an uncertain economic climate.
For a detailed analysis of forecasts, read our article on the Bank of Canada rate forecast for April 2026.
⚠️ Note: rates set by financial institutions can vary significantly from one bank to another. A mortgage broker can negotiate a rate 0.20 to 0.50% lower than the posted rate.
✅ 5. What to Do Before April 29, 2026
Whether you are a buyer, a homeowner with an upcoming renewal, or an investor, here are the concrete steps to take before the next BoC announcement:
1. 📋 Get a pre-approval — Lock in a fixed rate for 120 days. If rates drop, you can get the lower rate. If rates rise, you are protected.
2. 💰 Compare fixed vs variable — With a 0.49% spread in favor of variable, evaluate your risk tolerance. If further cuts are expected, variable could offer additional savings.
3. 🔄 Renewal coming up? — Start shopping for your rate 4 months before maturity. Compare at least 3 institutions. A mortgage broker can save you thousands of dollars.
4. 📈 Investors — Lower rates improve plex returns. Verify the net cashflow with current rates.
The current rate environment is favorable for buyers. With a policy rate at 2.75% and the possibility of an additional cut, this is an ideal time to secure your financing. A trusted real estate broker can guide you through the process and help you take advantage of current market conditions.
❓ 6. Frequently Asked Questions (FAQ)
What is the Bank of Canada interest rate in April 2026?
As of March 12, 2026, the Bank of Canada’s policy rate is 2.75%. The next announcement is scheduled for April 29, 2026.
When is the next Bank of Canada rate announcement?
The next Bank of Canada policy rate announcement is scheduled for April 29, 2026. Markets anticipate either a hold or a 0.25% cut.
How does the policy rate affect my variable mortgage rate?
The variable rate is directly linked to the policy rate. A 0.25% cut to the policy rate reduces your variable rate by the same amount. On a $450,000 mortgage, that represents savings of approximately $56 per month.
Should I choose a fixed or variable rate in April 2026?
In April 2026, the variable rate (~3.20%) is lower than the 5-year fixed rate (~3.69%). If the BoC continues cutting, variable could offer additional savings. Fixed provides the security of stable payments.
What should I do before the April 29, 2026 announcement?
Get a mortgage pre-approval to lock in a fixed rate for 120 days. If you have a variable rate, prepare for a potential payment decrease. Consult a broker to compare your options.
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