Mortgage payments6 min read · Updated October 23, 2026
Bank of Canada rate decision on October 28: what it means for your mortgage
The Bank of Canada decides on October 28. See what a 0.25, 0.50 or 1 point move does to a variable payment, and what a renewal costs, with worked numbers.
What is happening on October 28
The Bank of Canada sets a target for the overnight rate, called the policy rate. It is 2.25%. The Bank held it there on 2 September 2026, and it has stayed at that level since 29 October 2025.
At the September decision the Bank said consumer price inflation was near 3%, mostly because of higher gasoline prices, while core measures were close to 2%. It also noted that growth in the second quarter was strong and that new United States tariffs and Canadian counter-measures added uncertainty. Statistics Canada has since reported that the consumer price index rose 3.1% in the year to September.
The announcement on 28 October 2026 comes with a new Monetary Policy Report. Economists quoted in market coverage mostly expect a hold, with a hike seen as more likely later than now. That is opinion, not a decision. Treat every forecast, including this one, as a guess until 9:45 a.m. Eastern.
Who the decision affects, and who it does not
- Variable-rate mortgage, payment changes with prime. Banks usually move prime by the same amount as the policy rate within a day or so. Your payment moves with it.
- Variable-rate mortgage, fixed payment. Your payment stays the same, but more of it goes to interest if rates rise, so you pay down the balance more slowly. Check your lender's trigger rate.
- Fixed-rate mortgage. Nothing changes today. Fixed rates follow bond yields, which react to the Bank's outlook as well as its decision.
- Renewing in the next few months. Your new rate will be set by what lenders offer then. A decision that surprises the market can move those offers.
- Home equity line of credit. Usually priced off prime, so it moves the same day.
What a rate move does to a variable payment
These figures show the change in monthly payment for a payment that follows the rate, with 25 years left. They use an illustrative 4.45% starting rate, so the table shows the size of a move, not a forecast of your rate.
Two cuts and a quarter-point rise (a minus sign means a lower payment):
| Balance | −0.50 pt | −0.25 pt | +0.25 pt |
| $300,000 | -$84 | -$42 | +$43 |
| $400,000 | -$112 | -$56 | +$57 |
| $500,000 | -$140 | -$70 | +$71 |
| $600,000 | -$168 | -$84 | +$85 |
Larger rises:
| Balance | +0.50 pt | +1.00 pt |
| $300,000 | +$86 | +$174 |
| $400,000 | +$115 | +$232 |
| $500,000 | +$143 | +$291 |
| $600,000 | +$172 | +$349 |
Read across to your own balance. A $500,000 balance sees roughly $71 a month for every quarter point, so a full point is about $291 a month, or $3,486 a year.
The bigger shock: renewing an old low rate
For many households the main exposure is not Wednesday's decision. It is a renewal after a low-rate term. Take a $500,000 mortgage on a 25-year amortization at a fixed 2.0%, with a payment of $2,117 a month. After five years the balance is about $418,851 with 20 years left. At renewal, the payment becomes:
| Renewal rate | New payment (20 years left) | Change vs. old payment |
| 3.5% | $2,424 a month | +$306 |
| 4% | $2,531 a month | +$414 |
| 4.5% | $2,640 a month | +$523 |
| 5% | $2,752 a month | +$635 |
| 5.5% | $2,867 a month | +$749 |
Two points help. First, a renewal with the same lender usually does not require you to pass the stress test again, though rules differ if you switch lenders, so ask. Second, you can often lock in a rate offer 90 to 120 days ahead, which lets you plan instead of reacting to one announcement. For comparison, a new application is stressed at the greater of your rate plus 2 points or 5.25%, which is 6.50% on a 4.5% rate.
Three outcomes and what to check in each
If the Bank holds at 2.25%. Your variable payment does not change. The next date is 9 December 2026. Use the quiet to run the payment at +0.50 and +1.00 so you know your limit.
If the Bank raises the rate. Check the day's announcement against your lender's notice. Work out the new payment, whether it is a payment change or an amortization change, and whether your budget absorbs another move of the same size.
If the Bank cuts the rate. A cut lowers a variable payment and can lower new fixed offers, but not always by the same amount. Do not stretch to a bigger payment you may later regret. Some households keep paying the old amount to cut the balance faster.
Before October 28: a short checklist
- Find out whether your mortgage is variable with a changing payment, variable with a fixed payment, or fixed.
- Write down your balance, your rate, your remaining amortization and your renewal date.
- Run your payment at +0.25, +0.50 and +1.00 with the mortgage calculator.
- If you renew within 120 days, ask your lender what rate it would hold for you, and compare at least one other offer.
- Keep a cash cushion for at least one payment shock. If a +1.00 point move would break the budget, that is the number to plan around.
What not to do
- Do not switch from variable to fixed only because of a headline. Fixed rates already include what the market expects, and breaking a term can carry a penalty.
- Do not treat an economist's forecast as the decision.
- Do not forget property tax, heat and insurance. They sit on top of the payments above.
Common questions
What is the Bank of Canada interest rate now?
The policy rate is 2.25%. It has been unchanged since 29 October 2025 and was held again on 2 September 2026.
When is the next Bank of Canada rate announcement?
On 28 October 2026 at 9:45 a.m. Eastern, together with the Monetary Policy Report. The Bank has also scheduled a decision for 9 December 2026.
Will the Bank of Canada raise rates on October 28?
No one can say before the announcement. Some economists expect a hold and see a hike as more likely later. Plan for a range of outcomes instead of one forecast.
Does the Bank of Canada rate change my fixed mortgage?
Not during your term. A fixed rate stays the same until renewal. New fixed offers follow bond yields, which react to the Bank but do not move one for one with the policy rate.
How much does a 0.25 point rate rise add to a mortgage payment?
On a $500,000 balance with 25 years left and a payment that follows the rate, about $71 a month. On $300,000 it is about $43.
What is the mortgage stress test rate?
For most new insured and uninsured applications you must qualify at the greater of your contract rate plus 2 points or 5.25%.
Should I lock in a variable rate before the announcement?
There is no safe call. Locking in swaps rate risk for a price paid up front, and breaking a term can cost a penalty. Compare your lender's offers and your own budget limit.