If you think you know where interest rates are headed in 2026… think again.
Because here’s the surprising part: Canada’s biggest banks don’t even agree with each other.
And when the Big Six are split, that uncertainty matters, especially if you have a mortgage, a HELOC, or a renewal coming up.
The Big Six Are Split Into 3 Rate “Camps”
Right now, Canada’s major banks are basically dividing into three different opinions on what they feel the Bank of Canada might do this year.
1️⃣ The “Rate Cut” Camp
One bank is betting rates could actually go lower in 2026.
BMO believes we could see another 0.25% rate cut, which would reduce borrowing costs and offer some relief for variable rate borrowers. This would mean that the best variable rate could drop from 3.39%(high ratio/insured mortgage rate) to 3.14%.
If that happens:
- Variable mortgage payments could drop
- HELOC interest costs could ease
- Borrowing gets slightly cheaper again
Nice… but not guaranteed.
2️⃣ The “Rate Hike” Camp
On the other side, two banks think rates could rise again later in 2026.
- Scotiabank is the most aggressive, forecasting a 0.50% increase by the end of 2026
- National Bank is more cautious, calling for a 0.25% hike
Their concerns?
- Persistent inflation pressure
- Wage growth
- Weak productivity
If this camp is right then variable rate and HELOC borrowers will certainly feel higher monthly costs again. Keep in mind that this is just the forecast for 2026, and we do not know what will happen to rates beyond that, and a variable rate is usually a 5 year commitment.
3️⃣ The “Hold Steady” Camp
Then there’s the middle ground.
RBC, TD, and CIBC believe the Bank of Canada might just… do nothing.
No cuts.
No hikes.
Just steady rates throughout 2026.
That means:
- Stability (which isn’t bad)
- But also no immediate relief if you’re waiting for lower payments
- This also does not account for what will happen beyond 2026.
Why This Actually Matters for You
If you:
- Have a variable-rate mortgage
- Use a HELOC
- Or have a mortgage renewing in 2026
…this uncertainty can have a real dollar impact.
Here’s how each scenario plays out:
- Rate cut → Lower payments & cheaper borrowing
- Rate hold → Predictability, but no relief
- Rate hike → Higher costs on variable mortgages & HELOCs
And the tricky part? You don’t get to choose which one happens, and predictions can change at any time. To make things more interesting, the Bank of Canada itself has admitted it’s unsure whether the next move will be a hike or a cut. Their decisions are now fully data-dependent. meaning inflation numbers, jobs data, and economic growth could swing rates in either direction.
As mentioned, we have no strong forecasts for what happens beyond 2026. If rates do go up 0.25-0.5% in 2026, who is to say they wont come down the year after, or go up? As brokers, We are not in the prediction business unfortunately. We leave that to Nostradamus. If any broker tells you otherwise, they have other interests at play beside informing you of the realities of the market.
Final Thoughts
The biggest takeaway?
Don’t just “hope” rates fall.
Plan for all scenarios.
Because when even the experts don’t agree, the smartest move is flexibility:
- Know your renewal options early
- Understand fixed vs variable trade-offs
- Have a broker stress-test your payments to ensure if rates go up, you are still able to afford it
- Pick the option that puts your mind at ease the most, without having to constantly worry about rising rates
