Bank of Canada October 2026 decision: hold or hike? What it means for your mortgage

Short answer: The Bank of Canada rate decision for October 2026 comes on Wednesday, October 28, at 9:45 a.m. ET ^[1]. The policy rate is 2.25% today, where it has been since October 2025 ^[2]. Until recently, most forecasts called for a hold. In the past week, more economists and traders have said a Bank of Canada rate hike in October 2026 is possible, mainly because of high energy prices and trade uncertainty ^[15][16]. A hold is still possible too. No one can say for certain what the Bank will do, and you don't need to. What matters is how each outcome would affect your mortgage, and the steps that work whichever way it goes.

Decision-day update (October 28, 2026): The Bank of Canada announces its decision at 9:45 a.m. ET on October 28. We'll update this section that morning with the decision and what it means for your payments.

Hold or hike: where expectations stand

Here's what changed, as reported on October 20 and 21, 2026:

• Market pricing moved toward a hike. CBC reported that, according to Bloomberg data, traders in the overnight swap market put the odds of a quarter-point hike at 87%, up from 70% earlier in the week ^[15]. Market odds can change quickly and are not a decision.
• Economists are split. The consensus in a recent Bloomberg survey still pointed to a hold, while several bank and independent economists have changed their calls to a hike ^[15]. One Big Five bank economist said the Bank shouldn't hike next week, and that if it does, it can't be too aggressive ^[17].
• Why it's on the table. The Bank's Governor has warned that it may need to raise rates if energy prices stay elevated ^[15]. In September, the Bank said it was "prepared to adjust monetary policy as needed" ^[5].
• Why a hold is still plausible. Underlying inflation is close to 2% ^[4], fuel prices have yet to meaningfully spill into other prices ^[15], and September brought job losses that weakened the case for an immediate move ^[16].

The calm way to read this: a quarter-point move, if it comes, is a modest change. It's worth planning for, not worrying about.

What September 2026 CPI showed

Statistics Canada released the September Consumer Price Index on October 19 ^[3]. Here are the numbers that matter most for September 2026 CPI and Canada mortgage rates:

Source: Statistics Canada, The Daily, October 19, 2026 ^[3][4].

Prices for most things are rising at a pace close to normal, and grocery inflation has slowed. The big exception is energy, which is why the Bank is weighing a hike to keep higher energy costs from spreading.

Three possible outcomes on October 28

These are general patterns, not predictions. A cut looks least likely based on current reporting, but it's included for completeness. Lender pricing varies.

What a hike would mean for variable payments (illustrative example)

Variable rates are usually priced as prime plus or minus a set amount, and prime moves with the Bank's policy rate. Prime at the largest banks is 4.45% today ^[6]. Here's an illustrative example for a $400,000 balance with 25 years remaining, assuming a variable rate of prime minus 0.50 (3.95%) and monthly compounding:

Illustration only, not a quote. Your rate, balance, amortization and compounding will differ.

How you'd feel it depends on your mortgage type ^[7][18]:

• Adjustable payments: your payment rises soon after prime changes, roughly as shown above.
• Fixed payments on a variable rate: your payment stays the same, but more of it goes to interest and less to principal. If rates rise far enough, you could reach your trigger rate, so it's worth knowing where yours is ^[7].

Not sure where your variable mortgage stands? A licensed 8Twelve agent can check your rate, payment and options across 65+ lenders, at no cost to you, OAC. Compare current rates

Should I lock in my variable mortgage?

If you're asking should I lock in my variable mortgage, there's no single right answer, and the best choice depends far more on your budget than on the October 28 headline. A few things to weigh:

• Locking in buys certainty, usually at a price. Most lenders let you convert a variable mortgage to a fixed term, many allow this without a prepayment penalty when you stay with the same lender, but the fixed rate offered today may be higher than your current variable rate. Ask your lender what rate you'd get and whether any fees apply.
• Fixed rates already reflect expected hikes. Five-year fixed rates follow Government of Canada bond yields, which rose from about 3.2% in late August to 3.62% on October 20 ^[8]. Some of the possible hike is already in today's fixed offers.
• Consider your margin. If an extra $56 to $112 a month would be hard to absorb, certainty may be worth more than potential savings. If you have room in your budget and value the lower penalty for breaking a variable mortgage (often three months' interest), staying variable can still make sense.
• You don't have to decide by October 28. Conversion is usually available throughout your term. Many people wait for the decision and the Bank's new outlook, then decide calmly.

The Financial Consumer Agency of Canada explains the trade-offs between fixed, variable and hybrid options ^[18]. Our guide to fixed or variable mortgages in late 2026 covers the choice in more detail.

Why fixed rates are rising before the Oct 28 decision

If you've noticed fixed-rate offers creeping up even though the Bank hasn't changed its rate, you're not imagining it, and it isn't cause for alarm. Here's why fixed mortgage rates are going up in Canada right now:

• Fixed rates follow bond yields, not the policy rate. Lenders fund 5-year fixed mortgages based largely on 5-year Government of Canada bond yields, which were about 3.2% to 3.3% in late August and 3.62% on October 20 ^[8].
• Markets are pricing in the possibility of future hikes. A Big Five bank economist noted that bond yields had "already begun climbing in anticipation of BoC rate hikes, pushing fixed-rate mortgage rates higher before the central bank moves" ^[11]. That's an expectation, not a decision.
• Forecasters expect any hikes to be gradual. That economist described the expected increases as "a far cry" from the 2022 to 2023 cycle ^[11]. Another Big Five bank economist said he doesn't expect another full percentage point of increases in mortgage rates and that "most of the increase" is behind us ^[17].

What it means for you: if you're buying or renewing, the offer you lock in today already reflects these expectations. A rate hold protects you if yields keep rising, and most lenders let you take a lower rate if they ease before funding.

If you have a fixed-rate mortgage

Your rate and payment don't change until your term ends, whatever the Bank does. The decision can affect the rates you're offered at renewal, mainly through bond yields. On decision day, the Bank's tone and its new Monetary Policy Report can move yields more than the rate decision itself.

If you're renewing in the next few months

This is the group with the most to gain from acting before October 28, whatever happens.

1. Get a rate hold. Many lenders will hold a rate for about 90 to 120 days. If rates rise, you're protected; if they fall, you can usually ask for the lower rate.
2. Run your numbers at a slightly higher rate. Check that your budget works if your renewal rate is 0.25 to 0.50 points above today's offers.
3. Compare before you sign. Federally regulated lenders must send your renewal statement at least 21 days before your term ends, but you don't have to wait for it or accept it ^[9].
4. Know that switching is easier now. Uninsured straight switches between federally regulated lenders no longer require the stress test ^[10].
5. Choose a term for your budget, not the forecast. If a payment increase would be hard to absorb, the certainty of a fixed term may matter more than the lowest possible rate.

Our mortgage renewal guide and renewal checklist walk through each step.

Background: the loonie, housing and the Bank's own surveys

A few other stories are in the mix heading into decision day. None of them changes the steps above, but they help explain the headlines.

• The loonie after Alberta's vote. About three in four Albertans voted to remain in Canada in the October referendum question, and by October 20 the Canadian dollar was trading at roughly 71 U.S. cents ^[12].
• Housing cooled in September. National home resales fell 2.3% from August and the MLS Home Price Index slipped 0.4%, sitting 3.5% below a year earlier ^[11].
• What businesses and consumers told the Bank. The Bank's third-quarter surveys, released October 19, found business sentiment had improved but renewed trade tensions were weighing on firms' outlooks ^[13], and consumers' long-term inflation expectations rose, with trade tensions and energy prices cited as the main reasons ^[14].

We cover the longer-term view in will mortgage rates go up in 2027? and the broader hike scenario in Bank of Canada rate hike in 2026?

From our desk: Clients who start comparing 4 to 6 months before renewal rarely feel rushed on decision day. A rate hold means the announcement becomes information, not a deadline.

Heading into October 28, both a hold and a modest hike are realistic. Neither calls for a rushed decision. A rate hold, a quick budget check at a slightly higher rate, and a term that fits your situation will serve you well whichever way the Bank goes.

See what you'd pay: try our mortgage payment calculator with a few different rates.

This article is for general information only and isn't financial, legal or tax advice. Rates, products and terms change without notice and are available on approved credit (OAC). The rate and terms you qualify for depend on your individual financial situation, including credit, income, property and loan-to-value. "Best rates" means the most suitable options available for your situation, not a guarantee of the lowest rate. Example rates and payments are for illustration only, as of October 2026, and are not an offer. 8Twelve Mortgage arranges mortgages through 65+ lenders and does not lend directly. Licensed across Canada — see our licences.

Inflation figures are from Statistics Canada's October 19, 2026 release; the policy rate, prime rate and bond yields are from the Bank of Canada as of October 14 to 20, 2026. Market odds and economists' views are as reported by CBC News, The Motley Fool Canada and Canadian Mortgage Professional on October 19 to 21, 2026, and can change quickly. Payment examples assume a $400,000 balance, 25 years remaining, a 3.95% starting variable rate and monthly compounding, and are illustrations, not quotes. This article was written before the October 28 decision and does not predict its outcome.