Bank of Canada raises its rate to 2½%: what it means for mortgages

The Bank of Canada raised its policy rate by 0.25% to 2½% on 28 October 2026. Variable-rate borrowers feel it first. Fixed rates are already moving on their own.

The Bank of Canada raised its policy rate by 0.25 percent, to 2½% from 2¼%. It was the first thing most borrowers wanted to know. The second was what happens next.

What is the policy rate?

It’s not a rate that any Canadian consumer can get from their lender. It’s the rate banks pay the Bank of Canada to borrow overnight. It feeds into prime and variable mortgage rates that consumers are charged, fairly directly. Fixed rates follow bond markets more closely, which is why a fixed rate can move even when the Bank does nothing.

What did lenders do?

They moved first. In early October, CIBC and TD raised fixed mortgage rates by 0.20%, finishing a sweep of the Big Six Canadian banks.

What did the Bank say about housing?

The Bank of Canada warned of a "subdued" outlook for the housing market as the hike raises borrowing costs and the CBC reports fresh uncertainty in the Toronto-area market.

Was it a surprise?

Not entirely. The Bank Governor, Macklem, flagged the risk of delaying a hike too long in September, when speaking about inflation concerns.

Will rates go up or down next?

Nobody knows, and anyone who sounds certain is guessing. A forecast is a forecast, not a fact. Three things will tell you more than any headline:

1. The Bank's next announcement on 9 December 2026.

2. Inflation and jobs data.

3. Bond yields, which drive fixed rates.

This is general information, not advice. Speak to a mortgage broker, depending on your situation, before acting.

From Properti Edge

What would your rate look like?

Ask the Properti Edge AI Advisor for this week's rates across lenders. It answers like this, with the week stated:

What are 5-year fixed mortgage rates this week?

Here are the current 5-year fixed mortgage rates across lenders:

Across lenders:
Typical rate: 4.80%
Low rate: 4.20%
High rate: 5.30%

A "good" rate depends on your individual financial circumstances and risk tolerance. It's always a good idea to shop around and compare rates from different lenders.

Rates for the week of 30 Oct 2026.

Illustrative example of a Properti Edge AI Advisor conversation about rates. Rates across lenders: high, low and typical. Properti Edge analysis of CANNEX data, week of 30 Oct 2026.

Ask the AI Advisor about rates

Rates change weekly. General information, not advice.