10/28/2026
➡️ What happened?
The Bank of Canada increased its key interest rate by 0.25 percentage points to 2.50%, marking its first hike since July 2023. The decision reflects inflation remaining elevated longer than anticipated, largely due to energy costs. The Bank now forecasts inflation to reach approximately 3.5% by the end of the year, with a return to its 2% target not expected until mid-2028.
➡️ Variable-rate mortgages
Prime is expected to rise from 4.45% to 4.70%. For borrowers with adjustable-payment mortgages, that works out to roughly $14 more per month for every $100,000 outstanding. Those with fixed-payment variable-rate mortgages will see their payments stay the same, but a larger portion will go toward interest.
➡️ HELOCs and lines of credit
Since these products are generally linked to prime, borrowers should also expect their interest rates to increase.
➡️ Fixed-rate mortgages
There’s no immediate change for existing fixed-rate mortgages until renewal. Fixed rates are influenced by the bond market, and this increase was largely anticipated.
➡️ Buyers
For anyone with a mortgage pre-approval, it’s worth confirming that your rate hold is still valid. Most rate holds last between 90 and 120 days.
➡️ Renewing in the next year?
If you are renewing within the next 12 months, now may be a good time to secure a rate hold early rather than waiting for your lender’s renewal letter.
➡️ What’s next?
The Bank has indicated that another rate increase may be necessary, but it plans to proceed cautiously. The next rate announcement is scheduled for December 9.
