What the October 28 Bank of Canada Decision Could Mean for Your Payment

Short answer: The Bank of Canada makes its next rate call on October 28. After the September inflation report, markets expect it to hold at 2.25%, but they are pricing a possible quarter point hike in December. If you have a variable rate or renew in the next few months, now is the time to know your numbers and get a free rate hold in place.

By Tim Lacroix, Mortgage Broker. Written October 20, 2026. Rates are illustrative and subject to change.

Where do things stand right now?

The Bank of Canada’s policy rate is 2.25%. The next decision is Wednesday, October 28.

The big number this month was inflation. On October 19, Statistics Canada reported that inflation rose to 3.1% in September, up from 3.0% in August. Economists polled by Reuters expected 3.2%, so it came in a touch cooler than feared (Reuters via Investing.com).

Most of the jump came from gas, which was up 27.8% from a year ago. Take gas out and inflation actually slowed to 2.2%. The Bank’s preferred core measures were calmer too, with CPI trim at 1.8% and CPI median at 1.9% (Investing.com).

What does the market expect on October 28?

A hold, for now. After the inflation report, money markets expected the Bank to keep its rate at 2.25% this month, while pricing in a quarter point hike in December (Investing.com).

That shift started earlier in the month. Canada lost 68,300 jobs in September after losing 42,000 in August, and unemployment rose to 6.5%. After those numbers, TD said markets put the odds of an October hike at about 27% and a December hike at about 88% (Canadian Mortgage Professional).

So the hike risk hasn’t gone away. It has mostly moved later. Nobody knows for sure what the Bank will do, and we won’t pretend to.

What would a quarter point hike cost me?

If you have a variable rate, a Bank of Canada move changes prime, and prime changes your rate right away.

Money.ca ran an example: on a $500,000 variable mortgage at 4.00% with a 25 year amortization, a quarter point hike adds roughly $68 a month (Money.ca). Rates are illustrative and subject to change.

Your number depends on your balance and your rate. It also depends on your type of variable:

• Adjustable payment: your payment goes up the next month.
• Fixed payment: your payment stays the same, but more of it goes to interest, so you pay the mortgage down more slowly.

Lines of credit and HELOCs are tied to prime too, so a hike shows up there right away as well.

You can run your own numbers with our mortgage payment calculator.

Why did fixed rates go up anyway?

Fixed rates don’t follow the Bank of Canada. They follow Government of Canada bond yields. Five year yields climbed about 20 basis points in the month leading into early October, and that pushed fixed rates up before the Bank did anything (Canadian Mortgage Professional).

The big banks followed. On October 16, National Bank raised its advertised special fixed rates, putting its 5 year uninsured rate at 5.14%. BMO, CIBC, RBC, Scotiabank and TD had already made similar moves (Canadian Mortgage Trends). Rates are illustrative and subject to change.

There is a bit of good news. The 5 year yield closed at 3.525% on October 16, below its recent high of 3.729%, and some lenders have started trimming select fixed rates (Canadian Mortgage Trends). A bank’s posted special is not the whole market.

Will the Bank raise rates to cool house prices?

No. On October 1, Senior Deputy Governor Carolyn Rogers said plainly that the Bank should not use interest rates to target house prices: “Targeting house prices directly with interest rates would ask monetary policy to do more than it can reasonably do” (Canadian Mortgage Trends).

For Calgary buyers, that means any hike will be about inflation, not about making homes cheaper. Waiting on the Bank to bring prices down isn’t much of a plan.

What should I do this week?

You don’t need to panic. You do need a plan. Here’s what we’re telling our clients:

1. Check your renewal date. If it’s in the next 4 to 6 months, you’re in the window where a rate hold helps most. Our renewal page walks through each stage.
2. Get a rate hold. It costs nothing to have us set one up. If rates fall before your renewal or closing, you can still get the lower rate. If they rise, you’re protected. Here’s how a rate hold works.
3. Stress test your own budget. If you’re variable, ask yourself what a $68 a month bump, or two of them, would do to your household. If that feels tight, let’s talk about your options now, not after December.
4. Don’t sign your bank’s renewal letter yet. The first offer is rarely the best one. If your renewal payment worries you, read why your renewal payment could jump and what to do now.

We’ll add a dated update to the top of this article after the October 28 announcement.

Want us to look at yours?

Book a 10 minute rate check. Tell us your rate and renewal date, and a broker will compare fixed and variable for your numbers. No cost, no obligation. Prefer to talk? Call or text Tim at 403-648-1541.

Frequently asked questions

When is the next Bank of Canada rate decision?

Wednesday, October 28, 2026. The policy rate is 2.25%. After the September inflation report on October 19, money markets expected the Bank to hold in October and were pricing a quarter point hike in December.

How much would a quarter point hike add to a variable mortgage payment?

Money.ca worked through an example: on a $500,000 variable mortgage at 4.00% with a 25 year amortization, a quarter point hike adds roughly $68 a month. Your number depends on your balance, rate and whether your payment is fixed or adjustable.

Why have fixed rates gone up if the Bank of Canada hasn't raised rates?

Fixed rates follow Government of Canada bond yields, not the Bank's policy rate. Five year yields climbed about 20 basis points over a month into early October, and the big banks raised their fixed rates in response.

This article is general information, not personal financial advice. Rates, rules and programs change. Talk to a licensed mortgage broker about your situation. Lacroix Mortgage Group is licensed and powered by Mortgage Connection Inc.