By Josh Tagg, mortgage broker · Mortgages for Less with INDI Mortgage · Calgary, serving all of Alberta ·
Quick answer: If you were pre-approved this summer, check your rate hold before you write an offer. The Bank of Canada held at 2.25%, so variable rates didn’t move, but fixed rates follow bond yields, and the 5-year Government of Canada yield rose from 2.99% on June 24 to 3.69% on September 23. Rate holds usually last 60 to 130 days, so a hold from early summer may be close to expiring. If it lapses, a higher rate can shrink the mortgage you qualify for.
This came up in our September Edmonton market video with Jay Lewis, and it applies to buyers anywhere in Alberta. Here’s the short version from Josh.
Why did fixed rates go up when the Bank of Canada held?
Because they answer to different things. The Bank of Canada sets its policy rate, which drives the prime rate and therefore variable mortgages. It held that rate at 2.25% (Bank of Canada), and prime stayed at 4.45%.
Fixed mortgage rates are priced off bond yields, mainly the 5-year Government of Canada bond. That yield is set by investors, and it climbed through the summer:
5-year Government of Canada bond yield, 2026
| Date | Yield |
|---|---|
| June 24 | 2.99% |
| August 14 | 3.28% |
| September 23 | 3.69% |
| October 15 | 3.53% |
Source: Bank of Canada, benchmark bond yields. That’s a 0.70-point rise from late June to late September, before easing a little in October. Lenders don’t pass bond moves through point for point, but when yields climb that far, fixed rates follow. For the bigger picture, see why fixed rates rise while the Bank of Canada is on hold.
What happens if your summer rate hold expires?
A pre-approval can usually hold a rate for 60 to 130 days, depending on the lender (Financial Consumer Agency of Canada). A 120-day hold that started on July 1 runs out at the end of October. If you haven’t bought by then, you’re pre-approved again at whatever rates are on offer that day.
That matters for two reasons. Your payment goes up, and so does the rate you’re stress-tested at: the greater of your contract rate plus 2% or 5.25% (OSFI). Here’s an example where the new rate is 0.30 points higher than the one you held. It’s a hypothetical to show the effect, not a quote.
Same income, 5-year fixed, 25-year amortization
| Summer hold | Rate 0.30 points higher | |
|---|---|---|
| Contract rate | 4.24% | 4.54% |
| Stress-test rate | 6.24% | 6.54% |
| Payment on $450,000 | about $2,426 a month | about $2,501 a month |
| Mortgage the same income qualifies for | $450,000 | about $437,900 |
A 0.30-point move costs about $75 a month on the payment and takes about $12,100 off what you can borrow. If you were shopping right at the top of your pre-approval, that can be the difference between the house you were looking at and the one a price range down.
What should you do if you were pre-approved this summer?
- Find the expiry date on your pre-approval. Count forward from the day it was issued, not the day you started looking.
- Ask for an updated pre-approval before you write an offer if your hold has expired or is about to. Better to find out your new number now than during a financing condition.
- Keep the lower rate while you can. If your hold is still active and rates rise again, you keep the held rate until it expires. If rates drop, you can usually ask for the lower one.
The next Bank of Canada decision is October 28, 2026. That will move variable rates if the Bank changes course. Fixed rates will keep following the bond market either way.
When doesn’t this apply?
If you’re choosing a variable rate, the Bank of Canada’s hold means your rate hasn’t changed since the summer. If your income has risen or your debts have dropped since you were pre-approved, a higher rate may not change what you qualify for. And a rate hold is a commitment from one lender, not a guarantee: final approval still depends on the property and your documents.
Frequently asked questions
Why did fixed mortgage rates go up when the Bank of Canada held?
Fixed rates are priced off bond yields, not the Bank of Canada’s policy rate. The 5-year Government of Canada yield rose from 2.99% on June 24 to 3.69% on September 23, 2026, while the policy rate stayed at 2.25%.
How long does a mortgage rate hold last?
Usually 60 to 130 days, depending on the lender. Check the issue date on your pre-approval to work out when yours ends.
What happens when my rate hold expires?
You’d be re-qualified at the rates available that day. If they’re higher, your payment rises and the stress-test rate rises with it, which can lower the maximum mortgage you qualify for.
If rates drop during my rate hold, do I get the lower rate?
Usually you can ask for it. A rate hold protects you if rates rise; it shouldn’t stop you from getting a lower rate if they fall.
When is the next Bank of Canada decision?
October 28, 2026. It affects variable rates directly. Fixed rates move with the bond market.
Pre-approved this summer?
Send us your pre-approval and we’ll check when it expires and what you’d qualify for at today’s rates, so there are no surprises when you find the right home.
This is commentary, not advice. Figures as of October 15, 2026. Bond yields and the policy rate are from the Bank of Canada; the rate example is hypothetical. All mortgages are subject to lender approval. Josh Tagg, Mortgages for Less, a team at Indi Mortgage.
