The Bank of Canada raised rates on October 28, 2026: what it means for your mortgage
On Oct 28, 2026 (effective Oct 29) the Bank of Canada raised its policy rate by 0.25 points to 2.50%, its first increase since July 2023, and said further increases could be needed. Lenders moved prime to 4.70%. Variable-rate payments rise; fixed-rate mortgages don't change until renewal, and new fixed rates follow bond yields.
What did the Bank of Canada do on October 28, 2026, and why?
The Bank raised its target for the overnight rate to 2.50%, with the Bank Rate at 2.75% and the deposit rate at 2.45%. It was the first increase since July 2023, after a year of holds at 2.25%. The Bank said inflation is higher and more persistent than it expected in its July Monetary Policy Report, with high energy prices spreading to the prices of other goods and services, and that "there could be a need to increase the policy rate further." A change takes effect the day after its announcement.
Source: Bank of Canada, Press release: policy rate raised to 2.5% (October 28, 2026), effective October 28, 2026. Checked .How does the hike change a variable-rate mortgage?
Lenders' prime rates moved up by the same 0.25 points, to 4.70%. If your variable rate is prime minus a discount, it rose 0.25 points too. What happens next depends on your type of variable mortgage:
- Adjustable payment: your payment changes right away. The table shows the change per $100,000 borrowed.
- Fixed payment: your payment stays the same, but more of it goes to interest and less to principal. If rates rise far enough you can hit your lender's trigger point, and it will ask you to raise your payment or prepay.
| Your variable rate before | Before | After +0.25 | After +0.75 in total |
|---|---|---|---|
| 3.50% | $500.62 | $514.13 | $541.74 |
| 4.00% | $527.84 | $541.74 | $570.12 |
| 4.50% | $555.83 | $570.12 | $599.25 |
What would two more hikes cost on a $450,000 variable mortgage?
| Mortgage | $450,00025-year amortization, 5-year term |
|---|---|
| Variable rate today | 3.95%Lakeland Credit Union, collected Nov 13, 2026 |
| Fixed rate today | 4.59%ATB Financial, collected Nov 13, 2026 |
| Variable interest, prime holds | $83,396 |
| Variable interest, two more hikes | $93,838payment $2,362.86 → $2,487.64 |
| Fixed interest | $96,462payment $2,513.19 |
| Variable vs fixed after two hikes | −$2,624variable loses after 3 quarter-point hikes |
Open this example in the calculator →Computed Nov 13, 2026.
Did every lender move prime to the same rate?
Almost, but not all on the same day, and not all to the same number. Prime isn't set by the Bank of Canada: each lender sets its own and usually moves it the day a decision takes effect. These are the primes 19 lenders stated on their own rates pages when we read them. One stated its old prime on November 1 and had updated it two days later, which is why we date every reading. TD publishes a separate "TD Mortgage Prime" for its variable mortgages, above its prime for other loans.
| Lender | Prime |
|---|---|
| ATB Financial | 4.70% |
| BMO | 4.70% |
| Bow Valley Credit Union | 4.70% |
| Christian Credit Union | 4.70% |
| CIBC | 4.70% |
| Coast Capital Savings | 4.70% |
| Desjardins | 4.70% |
| First National Financial | 4.70% |
| Lakeland Credit Union | 4.70% |
| Meridian Credit Union | 4.70% |
| National Bank | 4.70% |
| nesto | 4.70% |
| RBC Royal Bank | 4.70% |
| Servus Credit Union | 4.70% |
| Simplii Financial | 4.70% |
| Tangerine | 4.70% |
| Vancity | 4.70% |
| Vision Credit Union | 4.70% |
| TD | 4.85% |
A variable rate is quoted as prime plus or minus a spread, so "prime − 0.90" at a lender whose prime is higher costs more than the same discount elsewhere. Compare the resulting rate, not the discount.
What does the hike do to a HELOC or line of credit?
Home equity lines of credit are usually priced at prime plus a margin, and many only require interest each month. Every 0.25-point rise in prime adds $20.83 a month of interest per $100,000 you owe on the line, straight away. Unlike a fixed-payment variable mortgage, there's no payment cushion: the minimum payment rises with the rate. The Financial Consumer Agency of Canada suggests checking whether you could still afford your payments if rates rose further.
Does the hike change my fixed-rate mortgage?
No. Your rate and payment don't change until your term ends. New fixed rates are priced off bond yields; the 5-year Government of Canada yield was 3.53% on Nov 12, 2026. A hike the market already expected may have been priced into yields beforehand. See why fixed rates move.
What should I do if I'm renewing or buying now?
- Compare your renewal offer with today's rate board. Federally regulated lenders must send a renewal statement at least 21 days before your term ends.
- An uninsured straight switch to another federally regulated lender at renewal no longer needs the stress test (OSFI, since November 21, 2024), so you can shop the whole market.
- Buying: you still qualify at the greater of your rate + 2 points or 5.25%. Get a pre-approval with a rate hold.
When is the next Bank of Canada decision?
Dec 9, 2026 at 9:45 a.m. ET. The full 2026 and 2027 calendar, and every decision since 2015, is on our Bank of Canada tracker.
What this means for you
- Adjustable variable: budget for your new payment now, and for another half point. The table above shows the change per $100,000.
- Fixed-payment variable: ask your lender for your trigger rate and how close you are; you may want to raise your payment voluntarily.
- Thinking of locking in: converting to fixed costs nothing at many lenders, but you'd lock in at today's fixed rate, and fixed penalties are usually larger. Run the break-even first.
- Fixed borrowers: nothing changes today. Start comparing about four months before renewal.
Frequently asked questions
How much will my variable payment go up?
About $13.90 a month per $100,000 for a 0.25-point rise, on a 25-year adjustable-payment variable at 4%.
Does the hike change my fixed rate?
No. A fixed rate stays the same until your term ends.
Will the Bank of Canada raise rates again?
The Bank said on October 28, 2026 that there could be a need to increase the policy rate further. Nobody knows; plan for a range.
Primary sources
- Bank of Canada — Press release: policy rate raised to 2.5% (October 28, 2026) (effective October 28, 2026). Checked .
- Bank of Canada — Policy interest rate. Checked .
- OSFI — OSFI exempts uninsured mortgage straight switches from the prescribed MQR (effective November 21, 2024). Checked .
- Financial Consumer Agency of Canada — Renewing your mortgage. Checked .
- Financial Consumer Agency of Canada — When interest rates rise. Checked .
- Bank of Canada — Government of Canada benchmark bond yield, 5-year (series BD.CDN.5YR.DQ.YLD) (effective November 12, 2026). Checked .