10/28/2026
🇨🇦 The Bank of Canada raised its policy rate by 0.25% today (October 28), from 2.25% to 2.50% — its first hike since July 2023.🙈⬆️
Three key points:
1️⃣ Policy rate now 2.50%.** Prime is still awaiting the major banks' announcements and generally follows within a day or two, expected at around 4.70%, but that is not guaranteed — each bank's announcement governs.
2️⃣ The Monetary Policy Report strikes a cautiously tighter tone.** Inflation has been around 3% since April and is expected to rise to about 3.5% by year-end, average about 3% in 2027, and return to 2% only by mid-2028. The Bank said the hike aims to reduce the risk that elevated energy prices spread more broadly through the economy; future decisions will be taken one meeting at a time, and there could be a need to raise rates further, but Governing Council will proceed carefully.
3️⃣ What it means for mortgages:
- Variable rates / HELOCs: these generally follow prime higher. If prime follows to around 4.70%, then as an illustration only, on a $500,000 mortgage with an adjusting payment, that is about $71/month more on a 25-year amortization and about $75/month on a 30-year amortization. Your lender's notice governs. For fixed-payment variable mortgages, the payment may stay the same while the principal/interest split changes.
- Fixed rates: these do not follow the policy rate directly; they follow bond yields, and the tone of the Monetary Policy Report can still move fixed-rate quotes.
Figures in this post are as of the October 28 announcement; the Bank's next decision is December 9.
