Variable Rate After the Hike: Why Your Payment May Not Change, and Should You Lock In?

Short answer: If your variable payment did not change after the October 28 hike, you most likely have fixed payments. More of each payment now goes to interest, so your balance comes down more slowly. Whether to lock into a fixed rate depends on how much a higher payment would stretch your budget, not on a guess about where rates go next.

By Tim Lacroix, Mortgage Broker. Written November 10, 2026. Rates are illustrative and subject to change.

What changed on October 28?

The Bank of Canada raised its policy rate a quarter point to 2.50%, its first hike since July 2023. The Bank said there could be a need to raise it further, but that it would proceed carefully (BNN Bloomberg).

The next day, the big banks raised prime to 4.70% (Canadian Mortgage Trends). Every variable mortgage and HELOC is priced off prime, so every one of them got more expensive. What you notice depends on the type you have.

Why didn’t my payment change?

Many variable mortgages have a fixed payment. When prime goes up, the payment stays the same, but the split inside it changes: more goes to interest and less goes to paying down what you owe. You are still paying more. It just shows up as a slower payoff instead of a bigger withdrawal.

If rates keep climbing, you can reach what lenders call a trigger rate. That is the point where your payment only covers the interest and nothing goes to your balance. If that happens, your lender will usually ask you to raise your payment, make a lump sum payment or change your amortization. Your lender can tell you your trigger rate, and we are happy to check it with you.

What if I have an adjustable payment or a HELOC?

Then you felt it right away. With an adjustable payment variable, your payment went up to match the new rate. A HELOC or line of credit secured on your home moves with prime too, so the interest on it went up the same day.

For a sense of size, 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 (Money.ca). Watch for a letter from your lender with your new payment. Rates are illustrative and subject to change.

You can run your own numbers with our mortgage payment calculator, and read more about how a HELOC works in Alberta.

Should I lock into a fixed rate?

Here is the part people often miss: you lock in at today’s fixed rate, not the rate that was around when you first signed. Fixed rates follow Government of Canada bond yields, not the Bank of Canada, and they started rising the day after the hike (MortgageLogic.news). Rates are illustrative and subject to change.

Brokers are seeing many variable clients hold off on locking in, because fixed rates had already moved up and they do not want to give up their lower variable rate (Canadian Mortgage Trends). That can be a sensible choice, but it should be a choice, not a default.

Questions we walk through with clients:

• Could you handle one more increase? Run your payment as if prime were another quarter point higher. If that number keeps you up at night, a fixed rate may be worth it.
• How long will you keep this mortgage? A fixed rate usually comes with a bigger penalty to break early. If you might sell or refinance, read up on prepayment privileges and penalties first.
• What does your lender allow? Many lenders let you convert a variable to a fixed term with no penalty, but some limit which terms you can choose. Check before you decide.
• What do both options cost side by side? Compare today’s variable payment, the payment after one more hike, and the fixed payment you would lock in.

What happens next?

We plan, we do not predict. In the Bank of Canada’s latest survey of market participants, the median forecast had the policy rate at 2.50% at the end of 2026 and 2.75% by March 2027 (Canadian Mortgage Trends). At the same time, the economy has stalled: real GDP was flat in August, and Statistics Canada’s early estimate for September was a 0.1% dip (Statistics Canada). A weak economy can make the Bank more careful, so either outcome is possible.

The next Bank of Canada decision is December 9. See today’s rates and our rate watch, or read what the October 28 hike means for your payment.

Is your mortgage renewing soon?

If your variable term ends in the next few months, this is the time to compare fixed and variable on your real numbers. Our guide to fixed vs variable at renewal covers the questions to ask, and a free rate hold protects you if fixed rates keep rising while you decide.

Want to know where your mortgage stands?

Send us your latest mortgage statement and we will tell you your current rate, how much of your payment is going to interest, how close you are to your trigger rate, and what a fixed rate would cost you today. No pressure and no cost. Book a quick call or text 403-648-1541.

Tim Lacroix, Mortgage Broker. Lacroix Mortgage Group, licensed and powered by Mortgage Connection Inc.

Sources: Bank of Canada decision via BNN Bloomberg, October 28, 2026; Canadian Mortgage Trends, prime to 4.70%; Money.ca, October 2026; MortgageLogic.news rate tracker; Canadian Mortgage Trends, November 4, 2026; Canadian Mortgage Trends, Market Participants Survey, November 9, 2026; Statistics Canada, October 30, 2026.

Frequently asked questions

Why didn't my variable mortgage payment go up after the October 2026 hike?

You likely have a variable rate with fixed payments. Your payment stays the same, but more of it now goes to interest and less to your balance, so it can take longer to pay off. With an adjustable payment variable or a HELOC, the cost went up right away when the big banks raised prime to 4.70% on October 29, 2026.

What is a trigger rate?

It is the rate at which your fixed payment only covers the interest, so none of it pays down your balance. If rates keep rising past that point, your lender will ask you to raise your payment, make a lump sum payment or change your amortization. Your lender can tell you your trigger rate.

Should I lock my variable mortgage into a fixed rate now?

It depends on your budget and your plans. You lock in at today's fixed rate, not the rate from when you signed, and fixed rates have already moved up since the hike. Many lenders let you convert with no penalty, but check your terms first. Compare your payment both ways before you decide.

Will the Bank of Canada raise rates again?

Nobody knows for sure. On October 28, 2026 the Bank said there could be a need to raise its rate further. In the Bank's latest survey of market participants, the median forecast had the policy rate at 2.75% by March 2027. The next decision is December 9, 2026.

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.