10/28/2026
The Bank of Canada hiked its rate today, from 2.25% to 2.50%. It’s the first rate hike since July 2023.
The Bank’s reason: inflation is higher and lasting longer than it expected in July, and it wants to stop high energy prices spreading into everything else.
Before today it cut nine times, from 5% down to 2.25%. GTA home prices still fell $100,000, from a $990,000 median in June 2024 to $890,000 in June 2026. All types of housing fell.
The last three rate cut cycles saw prices go up.
Two years after the first cut, prices were up 9% after 2007, up 36% after 2015 and up 48% after 2020. This time they’re down 10%.
Part of the answer is the bond market. A 5-year fixed mortgage is priced off the 5-year Government of Canada bond. That bond closed at 3.41% the day the Bank started cutting. Its low was 2.50% in March 2025. Yesterday it closed at 3.57%.
The other part is supply. 26,131 GTA homes were for sale in September. Only three Septembers in the last 22 had more: 2006, 2008 and 2025.
On a fixed rate, nothing changes until you renew. On a variable rate where the payment moves, it’s about $13 a month more for every $100,000 you owe, so $91 on $690,000. If your rate is variable but your payment stays the same, about $144 more of it goes to interest every month on $690,000.
The Bank said there could be more. The next decision is December 9, and I update the odds every trading day.
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