On 16 September the US Federal Reserve raised its interest rate for the first time since 2023. The yield on the ten-year US Treasury bond has climbed above 5%, to levels last seen in 2007. If you've had the news on at all this month, you've heard about it.
You don't have an American mortgage. You have a Canadian one, with a Canadian lender, governed by a central bank in Ottawa that hasn't changed its rate since last autumn. So it's fair to ask why any of this is your problem.
The short answer is that some of it crosses the border and some of it doesn't, and the part that crosses is not the part most people expect.
The two countries, side by side
| As of 25 September 2026 | United States | Canada |
|---|---|---|
| Central bank policy rate | 3.75% to 4.00% | 2.25% |
| Changed this month? | Raised a quarter point on 16 September | No change |
| 5-year government bond yield | 4.98% | 3.65% |
| A year earlier | 3.76% | 2.78% |
| Change over the year | +1.22 | +0.87 |
| 10-year government bond yield | 5.17% | 3.94% |
Look at the second row, then the last three. The Bank of Canada did nothing, and Canadian bond yields rose anyway. Over the past year the Canadian five-year yield has climbed 0.87 points while the American one climbed 1.22. In the last four weeks alone it was 0.31 against 0.50. Canadian yields have been moving in the same direction as American ones, by roughly two-thirds as much.
That is the channel. It has nothing to do with the Bank of Canada copying the Federal Reserve.
What crosses the border: bond yields, and so fixed rates
Fixed mortgage rates in Canada are priced from Government of Canada bond yields, because that is what lenders fund them with. And Canadian bonds compete with American ones for the same investors. When a US Treasury bond pays noticeably more, a Canadian bond has to pay a bit more too, or the money goes south. The two markets have moved together for decades, with Canada usually the quieter partner.
So a rise in US yields tends to show up in Canadian fixed mortgage rates without anyone in Ottawa deciding anything. Our own five-year fixed estimate was 4.00% on 28 August and 4.31% on 25 September. A year ago it was 3.44%.
In dollars, on a 25-year amortization, the month's move is about $17 a month for every $100,000 borrowed, and the year's is about $47. On a $450,000 mortgage that is roughly $75 a month more than four weeks ago, and about $210 a month more than a year ago.
What crosses the border: the dollar
The second channel is the exchange rate. Higher interest rates in the US make American dollars more attractive to hold. On 28 August a US dollar cost $1.39 Canadian; on 25 September it cost $1.41.
Two cents doesn't sound like much. It is $26 more on every US$1,000, which you notice on a winter trip, on anything ordered from an American website, and eventually on the fresh produce that arrives from the south once the Ontario growing season ends.
This matters for mortgages in a roundabout way. Import prices feed into Canadian inflation, and inflation is what the Bank of Canada watches when it sets its own rate.
What doesn't cross: the Bank of Canada's decision
Variable-rate mortgages follow the Bank of Canada, through prime. The Bank's rate is 2.25%, prime is 4.45%, and neither has changed this month. If you have a variable rate, your payment today is what it was in August.
The Bank of Canada sets its rate for Canadian conditions. The two central banks have been a long way apart before, and they are now: the gap between their policy rates is a point and a half or more. As it happens, both have their next scheduled announcement on the same day, 28 October.
What doesn't cross: the American mortgage itself
Headlines about US mortgage rates above 7% describe a different product. Most American homeowners borrow at one rate fixed for thirty years. Someone who locked in at 3% in 2021 can ignore all of this until they move.
Canadians can't. Most of us renew every five years or sooner, so a change in rates reaches a Canadian household within a few years whether it wants it to or not. That is the real reason rate news deserves more attention here than there. It's also why a renewal date is the most useful number to know about your own mortgage.
Who actually feels this
Renewing in the next year, into a fixed rate. This is where it lands. If that's you, the renewal calculator shows what your payment becomes at a rate you choose, and what a lump sum or a different payment schedule changes. Our post on four households at renewal works through the common situations.
On a variable rate. Nothing has changed for you this month.
Partway through a fixed term. Your rate is locked, so your payment is untouched. One thing has moved, quietly and in your favour: the penalty for breaking. A fixed-rate penalty is usually the larger of three months' interest and the interest rate differential, and the differential is measured against today's rates. When today's rates rise toward yours, it shrinks. On a $450,000 balance at 4.79% with three years left, the estimated differential was about $12,700 four weeks ago and about $8,200 on 25 September. Of course, the same rise that shrinks the penalty also removes most reasons to break, so for many people the answer is still to stay put. The break calculator will show which it is for your numbers.
Carrying other debt. Lines of credit and HELOCs follow prime, so they haven't moved either. The debt consolidation calculator compares the options.
A closing thought
None of this calls for a quick decision. Rates move, in both directions, and nobody who writes about them knows where they're going next, including us. What you can know is your own renewal date, your own balance, and what your payment would be at a few different rates. That takes ten minutes, and then the news is just the news.
How we arrive at our estimates is set out in where our rates come from, and the month-by-month picture is in our rates update for September.
US figures are from the US Treasury's daily yield curve and the Federal Reserve's statement of 16 September 2026; Canadian figures and the exchange rate are from the Bank of Canada. MortgageSkip's rates are estimates, not offers or quotes. This is general information, not advice.