The Bank of Canada raised its overnight policy rate by 0.25 percentage points to 2.50% on October 28, 2026. The decision was aimed at limiting the risk that higher energy costs feed into broader inflation. For homebuyers, the change matters, but its effect depends on the type of mortgage and the terms offered by each lender. Read the Bank of Canada’s announcement.
The policy rate isn’t your mortgage rate
The Bank’s policy rate influences borrowing costs, but it does not directly set the rate on every mortgage. Lenders set their own rates and offers. Bank of Canada data showed the typical prime rate at 4.45% on October 28 and 4.70% on November 4. The typical posted five-year conventional mortgage rate was 6.19% on both October 28 and November 11. Posted rates are reference points; borrowers may qualify for different rates. See the Bank’s posted-rate data.
What variable-rate borrowers should know
Many variable mortgage rates move with a lender’s prime rate, so a policy-rate increase can raise borrowing costs. With an adjustable-payment mortgage, the payment may change as rates move. With a fixed-payment variable mortgage, the payment may stay the same while a larger share goes toward interest and less toward principal. Review your mortgage documents and ask your lender about payment adjustments and any trigger rate. The Financial Consumer Agency of Canada explains how mortgage interest and variable rates work.
What about fixed-rate mortgages?
An existing fixed-rate mortgage generally keeps its rate until the term ends. At renewal, the rate will depend on the offers available then, your lender, and your mortgage details. If you are buying or renewing soon, request an updated quote, compare lenders, and make sure your budget still works if your borrowing costs are higher than expected.
What the latest housing data can—and can’t—tell us
The latest national housing figures available when this article was prepared covered September 2026, before the October rate decision. CREA reported that home sales fell 2.3% month over month, national inventory stood at 4.9 months—near its long-term average—and the MLS Home Price Index was down 3.4% year over year. These figures provide a market snapshot, but they cannot show the effect of the October rate increase. CREA’s next national release was scheduled for November 17. View CREA’s housing statistics.
A practical next step
If you are planning to buy, speak with a mortgage professional about how different rates and payment structures affect your budget. Then compare homes based on your needs, timeline, and monthly carrying costs. For local real estate guidance, contact Agent Asrar at 416-669-1597 or visit agentasrar.com.
This article is for general information only and is not mortgage, legal, or financial advice. Rates and lender offers can change; confirm current terms directly with a qualified mortgage professional.