Bank of Canada Rate Hike: October 28, 2026

The new policy target is 2.50%, a 0.25 percentage point increase. The Bank pointed to persistent inflation pressure, including energy costs spreading through the economy. It left further increases possible while stressing uncertainty. That is a policy assessment, not a promise about the next decision. See the official October 28 release.

The next scheduled announcement is December 9, 2026. Plan around payments you can carry today rather than counting on a particular outcome in December.

Variable mortgages generally use a lender's prime rate plus or minus a contractual spread. The lender sets prime and confirms when changes apply. Check that notice before changing your budget.

If Your Payments Adjust

With an adjustable-payment variable mortgage, a higher contract rate generally means a higher scheduled payment. Ask your lender for the revised amount and first payment date. The change depends on your outstanding balance, remaining amortization, payment frequency, and interest calculation. FCAC explains the difference between fixed and adjustable mortgage payments.

If Your Variable Mortgage Has Fixed Payments

Your scheduled payment may stay the same after a rate increase. More goes toward interest and less reduces the balance. An unchanged withdrawal from your bank account therefore does not mean unchanged borrowing costs.

A trigger rate is reached when the payment covers interest but no principal. What happens next depends on the contract: ask about payment adjustments, lump sums, and any balance limit. The Bank's explanation of variable mortgage trigger rates describes why the payment amount alone can hide the effect of higher rates.

Bring your latest statement to a review. The useful numbers are your balance, current rate, payment, and remaining amortization. Those tell us more than the original purchase price or the rate advertised to new borrowers.

Your existing fixed interest rate stays in place for your contracted term. This announcement does not add 0.25 percentage points to that rate. A new rate matters when you renew, refinance, or enter a new contract.

New fixed-rate offers depend on funding costs, bond markets, and lender pricing. They can move before an announcement or respond by a different amount. The Bank explains these forces in what determines mortgage rates and its discussion of bond-yield benchmarks for fixed mortgages.

If Your Renewal Is Approaching

Compare written offers using the balance and amortization you expect at renewal. Include payment size, prepayment privileges, portability, fees, and the cost of leaving early. A lower monthly payment achieved by extending amortization can increase total interest. FCAC's mortgage renewal guidance is a useful starting point.

If you may sell during the next term, tell your broker before choosing a product. A term that suits someone staying for five years may not suit someone planning a move to Langley next spring.

Buying a Home

Before making an offer, ask for an updated payment and qualification check. An existing pre-approval or rate hold has conditions and an expiry date. Confirm the property, loan amount, and closing date still fit. The FCAC pre-approval guide explains why a pre-approval does not guarantee final mortgage approval.

For most new uninsured mortgages at federally regulated lenders, the qualifying rate includes a buffer above the contract rate and a floor. Eligible straight switches at renewal have different treatment. Check the current OSFI qualifying-rate rules for your transaction. Your approved amount and comfortable monthly budget are separate questions.

For a Surrey condo, include strata fees and property taxes alongside the mortgage payment. For a move-up purchase, keep enough cash for closing costs and overlapping payments. The BC mortgage affordability calculator can help you compare budgets before choosing a price range.

Selling or Moving

This announcement alone cannot tell us what your home will sell for. Pricing a specific home calls for recent comparable sales, competing listings, and buyer activity for that property type. Keep that local pricing decision separate from a national interest-rate headline.

If you are buying and selling, review your current mortgage's portability, discharge costs, and closing dates together. Check the net proceeds you can use for the next down payment before committing to a replacement home.

Owning a Rental Property

Run a cash-flow check using your actual loan terms, rent, strata fees, taxes, insurance, and a maintenance allowance. A stable rent cheque does not remove the effect of a higher borrowing cost. Compare the revised monthly surplus with the cash reserve you want to keep.