The Bank of Canada left its policy rate at 2.25 per cent this morning, which is the outcome nearly everyone expected. But if you are buying in Markham this fall, or you have a mortgage coming up for renewal, the rate the Bank announced is not the number that will decide what your payment looks like. The number that matters is the bond yield sitting behind fixed mortgage rates, and that one has been climbing quietly all summer while the Bank has stayed still.
What the Bank actually said
The statement itself was measured. CPI inflation has been hovering around 3 per cent in recent months, driven mainly by persistently higher gasoline prices, while the core measures the Bank watches most closely have stayed near its 2 per cent target. At the same time the economy came in stronger than the Bank had penciled in, with second quarter GDP up 3.3 per cent against a forecast closer to 2.5 per cent. Set against that, new American tariffs and Canadian counter-measures were announced after trade talks between the two countries broke down, which cuts the other way entirely. Governing Council closed by saying it will assess the sustainability of the economic rebound and the outlook for inflation, and is prepared to adjust monetary policy as needed. That is deliberately non-committal language, and it is worth reading it as exactly that.
Why fixed rates can rise while the Bank sits still
This is the part that catches people off guard every time, so it is worth being plain about it. Your variable rate and your line of credit are tied to prime, which sits at 4.45 per cent and does not move on a hold, so if you are carrying a variable mortgage today nothing changed for you this morning. Fixed rates work differently. They follow the bond market, and the Government of Canada five and ten year yields have been drifting upward since early July, with the ten year now around 3.74 per cent after a move of roughly 36 basis points. Lenders price fixed mortgages off those yields, not off the overnight rate, which is why you can have a central bank standing perfectly still and a fixed rate quote that is meaningfully worse than the one you were given in June.
The other shift is in expectations. For most of the past two years the conversation in this market has been about when the next cut arrives. That conversation has changed. Roughly 63 per cent of analysts surveyed now expect the Bank's next move to be upward rather than downward, most of them pointing to the first half of 2027, and a couple of the big banks have floated the possibility of an increase as early as October. I am not telling you to treat that as a forecast, because these calls move around constantly and the tariff picture could turn again. I am telling you that planning around a cut that may never come is a weaker position than it was a year ago.
What this means for Markham specifically
Our local market is tighter than the national headlines suggest. Markham recorded 288 sales in July at an average price of $1,131,324 and a median of $1,062,500, with a sales to new listings ratio of 39.4 per cent, the tightest in York Region. Fewer sellers came out this summer than in the past couple of years, so the well prepared, sensibly priced home is facing less resale competition heading into the fall than it did last September. For a buyer in Unionville, Cachet, or Berczy, that means the inventory advantage you may have been counting on is thinner than you think, and waiting has a cost on both sides of the ledger now.
What I would actually do
If you are buying, get your pre-approval refreshed this week rather than next month, and hold the rate while you can, since most lenders will guarantee a quoted fixed rate for 90 to 120 days and that hold costs you nothing if rates fall. If you are renewing in the next year, start shopping four to six months ahead instead of waiting for the letter from your lender, and get a second quote before you sign the one in front of you. And if you are selling, price against the last ninety days of comparable sales rather than what your neighbour got in a different rate environment, because buyers in this market are doing the payment math carefully and they will notice.
The bottom line
The hold is not the story. Fixed mortgage rates are being pushed up by bond yields even while the Bank sits at 2.25 per cent, and the market's expectation has quietly flipped from the next cut to the next increase. If you are buying or renewing in Markham this fall, lock a rate hold now and plan on today's numbers rather than a cut that may not arrive.
If you want to talk through what this means for your own timing, reach out any time. Over the years we have walked a lot of Markham families through decisions exactly like this one, and it is always easier with the actual numbers in front of you.
Sources: Bank of Canada policy rate announcement, September 2, 2026; Canadian Mortgage Trends, September 2026; Toronto Regional Real Estate Board July 2026 market data.
