Bank of Canada Rate Decision: October 28, 2026
The Bank of Canada raised the policy rate to 2.50% on October 28, 2026 — up 0.25 points from 2.25%, its first hike since July 2023. Here is what the hike means for your variable mortgage, HELOC and savings, and what to watch before the December 9 decision.
The situation in 30 seconds
- Policy rate: 2.50% (raised Oct 28, 2026).
- Bank Rate: 2.75%, deposit rate 2.45%.
- Prime: 4.70% (big banks, effective Oct 29, 2026).
- Inflation: September CPI 3.1%.
- Next announcement: December 9, 2026, with a Monetary Policy Report in January 2027.
What the forecasters expect
Economists are split, which is itself the story:
- TD Economics expects the Bank to stay on hold in October and remain data-dependent, after September's 68,000 job losses "poured cold water" on near-term hike expectations.
- BMO chief economist Douglas Porter prescribes "watchful waiting," arguing two straight months of sizable job losses wash away the summer's labour-market strength.
- Scotiabank sees the policy rate reaching 2.50% by the end of 2026, while National Bank expects a hold at 2.25% through 2026, rising to 2.75% by the end of 2027.
- Capital Economics forecasts two quarter-point hikes starting next year, taking the rate to 2.75%, but argues a soft economy should limit how far hikes go.
- Markets price about a 75% chance of a hold on October 28 (roughly 25% for a hike), down from near 50–50 in late September — with a December hike priced near 90%.
Translation: almost nobody expects a cut. The debate is hold-now-hike-later versus hike-soon.
What the hike means now
- Variable-rate mortgage / HELOC: rates move only when prime moves — check your lender's notice. Fixed-payment variable borrowers see more interest and a longer amortization, not a higher payment, until a trigger rate.
- Fixed rates: do not move mechanically with the policy rate — they track the 5-year bond yield (~3.57–3.6% in late October).
- Savers: may see new GIC/HISA offers edge up, not guaranteed.
What a 0.25% hike means in dollars
With the Bank now at 2.50%, if prime matches the move, prime typically rises to 4.70%. On a $500,000 variable-rate mortgage, a 0.25-point increase adds roughly $70–$75/month in interest (about $850–$900/year) for borrowers whose payments adjust — less for those with fixed payments but a longer amortization. Run your own numbers with our mortgage calculator.
Renewing soon? Read this first
If your 5-year fixed term from 2021–2022 is renewing now, you are renewing into a higher-rate world no matter what happens October 28. Three checks before you sign:
- Get the real renewal rate in writing — then shop it. Lenders negotiate; the posted renewal letter is rarely the best offer.
- Compare fixed vs variable honestly — variable is cheaper today (lowest variable rates around 3.6% vs 5-year fixed around 4.6% in mid-October), but the direction of risk is up, not down.
- Stress-test a hike — can your budget absorb prime at 5%? If not, the certainty of fixed has real value.
Full walkthrough: Mortgage Renewal Guide for Late 2026.
FAQ
When exactly is the announcement?
It happened Wednesday, October 28, 2026 at 9:45 a.m. Eastern, with the Monetary Policy Report. The next decision is December 9, 2026.
Will my variable rate rise automatically?
Only when your lender moves prime. Check your lender's prime notice, not the BoC headline alone.
Why are fixed rates rising if the policy rate is flat?
Fixed mortgage rates follow the 5-year Government of Canada bond yield, which has been drifting higher on global rate pressure — not the Bank's overnight rate. That is why fixed and variable rates can move in opposite directions.
Is this financial advice?
No. This is an educational summary of public forecasts and market pricing As of October 16, 2026. Forecasts change. Talk to a licensed mortgage professional about your own situation.
Sources
Bank of Canada policy rate and announcement schedule; TD Economics, BMO, Scotiabank, CIBC and Capital Economics published outlooks; LSEG/CORRA market pricing via Canadian media reporting, October 2026. Figures As of October 16, 2026 and subject to revision. Decision result and forecasts verified October 28, 2026 (Bank of Canada announcement via Dow Jones/TradingView; Ratesopedia; WOWA prime check). Pre-decision forecaster views above are retained as context and are dated October 16–23, 2026.