The Bank of Canada just raised rates. What it means for your mortgage renewal
On October 28, 2026, the Bank of Canada raised its policy rate by 25 basis points to 2.50%. Prime and variable-rate pricing usually rise soon after a hike; fixed renewal rates follow bond yields and lender pricing, so they can move before or after a decision. If your mortgage renews in the next few months, ask your lender for a written rate hold, check whether you can renew early, and compare your written offer before you sign. The next scheduled decision is December 9, 2026.
Last updated October 28, 2026.
What today’s increase means if your mortgage renews soon, what the Bank of Canada has said about the renewal wave, and three things to do before you sign.
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What the Bank of Canada did on October 28, 2026
- Policy rate up 25 basis points to 2.50%. The Bank raised its target for the overnight rate to 2.5%, with the Bank Rate at 2.75% and the deposit rate at 2.45%.
- Why. The Bank said inflation is higher and more persistent than it projected in July, and it raised the rate “to reduce the risk that continuing high energy prices spread broadly to the prices of other goods and services.”
- What it said about next steps. “There could be a need to increase the policy rate further, but given uncertainties, Governing Council agreed to proceed carefully.”
- Next decision: December 9, 2026. The next Monetary Policy Report is due January 27, 2027.
Source: Bank of Canada, “Bank of Canada raises the policy rate by 25 basis points to 2½%” (October 28, 2026).
What markets were pricing
Overnight index swaps tied to CORRA, Canada’s overnight rate benchmark, are one way to see what traders are pricing for the policy rate. On the curve BlueGamma published on October 27, 2026, the day before the decision, swap pricing implied the overnight rate rising further through 2027, to about 3.50% by the end of that year.
This is market pricing, not a forecast by FairRate Canada or the Bank of Canada. It was captured before the October 28 announcement and can shift materially on a single data release. Do not plan your renewal around it; plan around the written offer in front of you.
Source: BlueGamma, Bank of Canada market-implied rate path (CORRA OIS), last updated October 27, 2026.
Why this matters for renewals right now
In its May 2026 Financial Stability Report, the Bank of Canada said that over the following 12 months the last of the five-year, fixed-payment mortgages taken out during the pandemic would renew. That group is about 12% of all outstanding mortgages in Canada, and the Bank estimated these borrowers would see their payments rise by about 15% on average.
That estimate was published in May, before today’s increase. The Bank also said that by the second half of 2027, nearly all mortgage holders facing large payment increases will have renewed. If you are one of them, the difference between the first offer your lender sends and a competitive rate for the same term is worth checking.
Source: Bank of Canada, Financial Stability Report—2026, Households.
What you can do now if your mortgage renews soon
- Ask for a written rate hold. Ask your lender what rate it will hold for your renewal, for how long, and whether you get the lower rate if its pricing drops before your renewal date. Get the answer in writing.
- Check whether you can renew early. Many lenders let you renew months before your term ends, usually without a penalty if you stay with them. Switching lenders before maturity is a prepayment and can cost a penalty. See how early each major lender lets you renew.
- Compare the offer before you sign. A rate hike is not a reason to accept the first number. Put your written rate beside what banks actually charged on the renewal rate benchmark, then run it through the free checker for a same-term comparison and the questions to ask your lender.
Fixed or variable? A hike makes variable payments rise sooner, while a fixed offer locks today’s pricing for the term. Compare the term, the penalty rules and how much payment risk you can carry, not just the headline rate.
Holding a renewal offer? Check it before you sign
For a 3-year or 5-year fixed renewal offer, FairRate’s free checker places your written rate beside dated Canadian market context and estimates the payment difference, so you know what to ask your lender.
Check my renewal offer →Frequently asked questions
Does the Bank of Canada rate hike change my fixed renewal rate?
Not directly. The policy rate moves prime and variable-rate pricing. Fixed mortgage rates are set by each lender and tend to follow Government of Canada bond yields, which can move before or after a decision. Check the rate in your written renewal offer rather than assuming it moved by 0.25%.
Will my variable-rate mortgage payment go up?
Lenders usually raise their prime rate soon after a Bank of Canada increase, and variable rates are priced as prime plus or minus a set amount. If your payment adjusts with prime, it will usually rise. If you have a fixed-payment variable mortgage, your payment may stay the same while more of it goes to interest. Your lender’s notice and mortgage agreement control.
Should I ask my lender for a rate hold now?
If your renewal is coming up, asking costs nothing. Ask for the held rate in writing, how long the hold lasts, and whether you get a lower rate if the lender’s pricing drops before your renewal date. A hold protects you from increases during that window, but it is not a reason to skip comparing the offer.
Can I renew early to get ahead of further increases?
Many lenders let you renew with them months before your term ends, often without a penalty if you stay with the same lender. Switching to another lender before maturity is a prepayment and can trigger a penalty. Our early renewal guide lists each major lender’s published window.
Are rates going to keep rising?
Nobody knows. The Bank of Canada said there could be a need to increase the policy rate further, but that it will proceed carefully given uncertainties. Overnight index swap pricing compiled on October 27, 2026 implied further increases through 2027. That is market pricing, which can change quickly, not a forecast by FairRate Canada or the Bank of Canada.
When is the next Bank of Canada rate decision?
The Bank of Canada’s next scheduled announcement for the overnight rate target is December 9, 2026. Its next Monetary Policy Report is due January 27, 2027.
Sources
- Bank of Canada press release, October 28, 2026
- Bank of Canada, Financial Stability Report—2026 (May 2026), Households
- BlueGamma, market-implied Bank of Canada rate path (CORRA overnight index swaps)
Last updated October 28, 2026. The Bank of Canada does not endorse FairRate Canada or this page.
Related renewal guides
Every major Canadian lender’s early-renewal window and penalty rule, from the lenders’ own pages.
What Canadian banks actually charged last month versus posted rates, from Bank of Canada data.
What to check before you sign the renewal your lender sent.
The full renewal decision: offer, payment, penalties, fees and switching.
Discharge, legal, appraisal and registration costs when you move lenders.
Estimate how a higher renewal rate changes your monthly payment.
Important limitation: 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.