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Bank of Canada Decides Oct 28: Hike Expected, Mortgage Impact

  • by- Grihik
  • Oct 27, 2026
Markets see about a 75-80% chance the Bank of Canada raises its rate to 2.50% on Oct 28. What it could mean for variable and fixed mortgages.
Bank of Canada Decides Oct 28: Hike Expected, Mortgage Impact

The Bank of Canada announces its next rate decision on Wednesday, October 28, at 9:45 a.m. Eastern (7:15 p.m. IST), together with its quarterly Monetary Policy Report. The overnight rate is 2.25%, where it has been since October 29, 2025.

[UPDATE] Replace this preview with the actual decision once the Bank announces it.

What do forecasters expect?

A Reuters poll of 34 economists on October 21-23 found 19, or 56%, expect a quarter-point hike to 2.50%, the Bank's first move in a year. That is a sharp reversal: in the previous poll 80% had expected the Bank to hold through the end of 2026. In the new poll, 16 of 29 respondents also forecast one more hike before March 2027, with the rate then holding at 2.75%. Interest rate futures moved from pricing roughly a 30% chance of an October hike to about three in four, and one market note put the probability near 80% on Monday. Many economists changed their view after remarks by Governor Tiff Macklem.

Why might the Bank hike?

Headline inflation is around 3.0% to 3.1%, driven partly by oil prices, and the Bank wants to prevent a rise in inflation expectations. Against that, unemployment was 6.4% in August and trade tensions with the U.S. weigh on growth. Not all forecasters agree: earlier in October most economists, including TD, Desjardins, RBC and Capital Economics, expected a hold through 2026.

 

What would a hike mean for mortgages?

  • Prime rate: the big banks' prime would be expected to rise from 4.45% to 4.70%, usually the next day

  • Variable-rate mortgages and HELOCs: payments or amortisation would change within days

  • Fixed rates: they follow bond yields, not the policy rate, so they have already been rising this fall

  • Fixed-term borrowers: your payment does not change until renewal

What about housing demand?

Canada's housing is already soft: Toronto sales fell 9% year on year in September, Vancouver-area sales fell 8.4% and Calgary's fell 3.8%.

What next?

The Bank's next decision after Wednesday is on December 9.