Bank of Canada raises its policy rate to 2.50%: what it means for your renewal offer
What happened
On October 28, 2026 the Bank of Canada raised the target for the overnight rate by 25 basis points, from 2.25% to 2.50%. The new setting appears in the Bank’s published policy-rate series from October 29, 2026. For context, chartered banks charged an average 4.58% on uninsured 5-year-and-over fixed mortgages and 3.90% on uninsured variable-rate mortgages in August 2026, the latest month published.
What it means if you are holding a renewal offer
If the Bank holds
- Prime and variable-rate pricing stay where they are; a variable renewal offer quoted as prime minus a discount does not change.
- Fixed renewal rates follow bond yields and lender pricing, not the decision itself, so a hold does not mean your fixed offer is “right”.
- With no rate move to wait for, compare your written offer with what banks actually charged and ask your lender to close the gap.
If the Bank cuts
- Lenders usually lower prime soon after a cut, so variable-rate payments or offers tied to prime fall.
- Fixed rates may already reflect an expected cut. Ask whether your lender will reprice a fixed offer before you sign, and whether your rate hold lets you take a lower rate if pricing drops.
- A lower variable rate is not automatically better than a fixed offer; compare term, penalties and payment risk.
If the Bank raisesThis decision
- Prime and variable-rate pricing usually rise soon after a hike.
- If you are holding a fixed renewal offer with a rate hold, check its expiry date: a held rate can be worth keeping if new offers are being priced higher.
- Compare the held offer with the benchmark and the checker before it expires rather than waiting for a better quote.
Check your offer now
Compare your written renewal rate with what banks actually charged, then run it through the free checker for a same-term comparison with current market context.
Check my renewal offer →Source: Bank of Canada, target for the overnight rate (Valet series V39079) and interest rate announcements; benchmark figures from the Bank of Canada’s interest rates charged on new lending by chartered banks. Used under the Bank of Canada terms of use; the Bank of Canada does not endorse FairRate Canada.
FairRate Canada is an independent educational comparison and reporting product — not a lender, mortgage broker, mortgage agent, law firm, financial advisor, or mortgage underwriter. FairRate does not arrange mortgages, take applications, or approve credit. If you choose to be introduced to a mortgage broker, FairRate may earn a referral fee; we’ll always ask first, and your result never depends on it. The current benchmark-backed checker and paid benchmark reports support Canadian 3-year fixed and 5-year fixed renewal offers and use fresh public same-term fixed comparison context when a usable source is available. Variable-rate and unsupported terms should not be compared against these fixed-term references. Broader Bank of Canada data may be used for contextual purposes. Results are not a lender quote, approval, qualification result, personalized advice, or guarantee of a lower rate or savings. Verify current rates, eligibility, fees, penalties, product terms, and switching costs with the relevant lender and, where appropriate, a licensed mortgage professional or other qualified advisor.