BoC Oct 28 Rate Decision: What It Means for Your Mortgage
The Bank of Canada raised its policy rate to 2.50% on October 28, 2026 — the first hike since July 2023. The pre-decision debate is settled; what matters now is whether your lender moves prime, and by how much your payment or amortization changes.
How we check the numbers: every figure on this page is calculated from official CRA, Statistics Canada or Bank of Canada data and cross-checked with the free calculators on this site — run them yourself to verify.
The short version
The Bank cut to 2.25% in October 2025 and has held through seven straight decisions, most recently September 2, 2026. Markets now put the odds of an October hike at roughly one in three, with about one hike priced in by the December 9 decision. Economists are openly split — which is exactly why October 28 matters.
Why a hike is being discussed
Three things changed the conversation:
- Inflation hit 3.0% in August — the very top of the Bank's 1–3% control range around its 2% target. Strip out gasoline and prices still rose 2.4%, up from 2.2% in July. Underlying pressure is building, not fading.
- The Bank itself is more worried. In September, Governor Macklem said the risks of higher inflation had increased, and the Bank has since raised its inflation forecast. New tariffs are making the growth outlook more uncertain at the same time.
- Some big-bank economists expect a move. UBS, Manulife, Oxford Economics and Scotiabank have all floated an October increase. Markets agree it's live: about a 33% chance priced for October, rising toward December.
One more data point lands before the decision: September inflation prints on October 19. A hot number would strengthen the hike camp considerably.
Why a hold is still the base case
- TD Economics expects a hold. After weak September jobs data, TD's Andrew Hencic said the report "pours cold water on near-term rate hike expectations," with wage growth contained at 2.4% and growth likely slowing in Q4 as tariffs bite.
- The labour market is soft underneath. Unemployment was 6.4% in July, and the Bank still sees excess supply and subdued demand for labour.
- Seven holds is a pattern, not an accident. The Bank has been comfortable at 2.25% — the bottom of its 2.25%–3.25% neutral range — for a full year. It takes convincing data to break that.
What a 0.25% hike actually costs you
The Bank has hiked; big-bank prime rose to 4.70% effective October 29, 2026. The math, computed at current rates:
Two catches most people miss:
- Fixed-payment variable mortgages don't change your payment — instead, more of each payment goes to interest and your amortization stretches. Push far enough and you hit the trigger rate, where the lender can demand higher payments.
- HELOCs and lines of credit move with prime dollar-for-dollar. There's no amortization cushion — the interest charge just goes up.
Fixed mortgages are a different story. They're priced off bond yields, not the policy rate — and fixed rates have already been climbing through October as markets price in the possibility of hikes. If you're renewing soon, the fixed-rate market is moving before the Bank does.
Your checklist after the October 28 hike
- Know your mortgage type. Adjustable-payment variable? Fixed-payment variable? Fixed? Each reacts differently — check your contract, not your memory.
- Check your lender's prime notice and your next statement. Adjustable-payment borrowers see the payment change; fixed-payment borrowers see the interest/principal split change.
- Run the +0.25% math on your actual balance. Use the $14-per-$100k rule above.
- Savers: enjoy it while it lasts. A hold keeps HISA and GIC rates where they are; a hike nudges new GIC rates up slightly. Either way, don't leave cash in a 0% chequing account.
- Watch December 9, not October 19. The next decision — plus whether further hikes follow if inflation stays near 3%.
Frequently asked questions
When exactly is the Bank of Canada's October 2026 decision?
October 28, 2026, released with the Bank's Monetary Policy Report. The final decision of 2026 is December 9, and the first of 2027 is January 27.
What is the prime rate in Canada right now?
4.70% at the big banks (RBC, TD, BMO, Scotiabank, CIBC, National Bank), effective October 29, 2026. They set it 2.20 percentage points above the Bank of Canada's 2.50% policy rate and move it in lockstep, usually effective the day after a Bank announcement.
Will a BoC hike raise my fixed mortgage rate?
Not directly. Fixed rates follow government bond yields, which move on expectations — that's why fixed rates have been climbing already. A hike (or even strong hike expectations) pushes bond yields and fixed rates up; your existing fixed rate never changes.
Should I lock in a variable rate before October 28?
That depends on your contract, your risk tolerance and what your lender offers — this article can't answer it for you. What you can do free: get a rate hold if you're renewing within 6 months, and run the +$14-per-$100k math on your balance so the decision isn't a surprise.
What happens to HELOCs if rates rise?
HELOC interest is almost always prime plus a margin, so a 0.25% policy hike raises your HELOC rate by the full 0.25% — immediately, with no amortization cushion.
Sources
- Bank of Canada — Bank of Canada raises the policy rate by 25 basis points to 2.5% (October 28, 2026 decision)
- Bank of Canada — Monetary Policy Report, October 2026 (PDF)
- Bank of Canada — Policy interest rate (official)
- The Canadian Wire — BoC decision October 28, 2026: hike or hold (policy rate 2.25%, prime 4.45%, CPI 3.0%)
- WOWA.ca — Canada prime rate history (Sept 2, 2026 hold at 2.25%)
- Canadian Mortgage Professional — jobs data and October hike odds (Oct 9, 2026)
- Insight Finance — rate hike odds and renewal math (Oct 2026)
- ZipZed — rates hold at 2.25%, fixed mortgages climbing (Oct 2026)
Paying down the mortgage instead?
We ran the numbers: $500 extra a month on a $500k mortgage vs investing it — the 2026 math, with real amortization figures.
Educational content only — not financial advice. Figures are estimates; confirm your own situation with the CRA or a licensed financial advisor. See our Disclaimer.