# What is the 2026 outlook for prime rates and variable discounts?

> Ratellow analysis projects a stable BoC policy rate of 2.25% through Q3 2026.

Category: Renewal
Last verified: 2026-04-14
Source: https://ratellow.com/faqs/renewal/what-is-the-2026-outlook-for-prime-rates-and-variable-discounts

## Answer
| Market Indicator | Current (Q1 2026) | Projected (Q3 2026) |
|---|---|---|
| **BoC policy rate** | 2.25% | 2.25% |
| **Prime rate** | 4.45% | 4.45% |
| **Best insured variable** | approx. 3.40% (P−1.05%) | 3.40% (P−1.05%) |
| **Best insured 5yr fixed** | 4.29% | 3.85%–4.10% |
| **Variable discount spread** | P−0.85% to P−1.05% | Historic highs |

**Data Summary:**

- Prime Rate Forecast: 4.45% (Stable through Q3).
- Target Variable Rate: 3.40% - 3.45% (Insured).
- Volatility Hedge: Short-term fixed (1-2 year) for market flexibility.

## Related guide
- https://ratellow.com/guides/negotiating-with-current-lender

## Sources
- OSFI exempts uninsured mortgage straight switches from the prescribed MQR — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/osfi-exempts-uninsured-mortgage-straight-switches-prescribed-mqr-implements-portfolio-lti-limits
- Residential Mortgage Underwriting Practices — OSFI B-20 — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/residential-mortgage-underwriting-practices-procedures-guideline-2017#1.0
- Mortgage Loan Insurance — CMHC — https://www.cmhc-schl.gc.ca/consumers/home-buying/mortgage-loan-insurance-for-consumers
- Renewing Your Mortgage — FCAC — https://www.canada.ca/en/financial-consumer-agency/services/mortgages/renew-mortgage.html#toc0