Bank of Canada October 28, 2026 Rate Decision: Hike or Hold?

The Bank of Canada announces its next interest rate decision on Wednesday, October 28, 2026, at 9:45 a.m. Eastern, along with its quarterly Monetary Policy Report. Its policy rate has been 2.25 per cent since October 2025, through seven straight holds.

For most of this year the only question was when the Bank would cut again. That changed after oil prices jumped with the war with Iran. Markets now treat October as a close call between a hold and the first rate increase since 2023. Here is what the Bank is weighing, who expects what, and what each outcome means for your mortgage.

How we got here

In its September 2 statement, the Bank said inflation was near 3 per cent because of gasoline, while core inflation was about 2 per cent. It called the upside risk to inflation higher because of the Middle East conflict and the largely closed Strait of Hormuz, and said it was “prepared to adjust policy as needed.” Its summary of deliberations, published September 16, showed the Governing Council worried that oil would stay high for longer.

The case for a hike

• Headline inflation is stuck at 3 per cent. August CPI was 3.0 per cent, the same as July, at the top of the Bank’s 1 to 3 per cent range.
• Oil keeps rising. Brent crude went back above US$100 on October 7.
• The economy grew fast in the spring. Second-quarter GDP rose at a 3.3 per cent annual rate, the fastest since 2023.
• The US Federal Reserve has already moved. It raised its rate by a quarter point on September 16, to a range of 3.75 to 4.00 per cent, its first increase in more than three years.
• Bond markets are pricing it. By mid-September, traders saw an October hike as a coin flip. Overnight swaps now price about one percentage point of increases over the next 12 months.

The case for holding

• Core inflation is fine. The Bank’s preferred measures were 1.9 per cent (CPI-trim) and 2.0 per cent (CPI-median) in August. The problem is mostly gasoline, which a rate hike does little to fix.
• Jobs are weakening. Canada lost 42,000 jobs in August against expectations of a gain. Unemployment is 6.4 per cent and wage growth slowed to 2.0 per cent.
• Growth has cooled. GDP was flat in July, with a small gain estimated for August. The Bank expects third-quarter growth of about 1.5 per cent.
• Fixed rates have already risen. The 5-year bond yield has climbed a full point since February, which has pushed fixed mortgage rates up without the Bank doing anything.
• US tariffs remain a risk to Canadian exports and investment.

What economists expect

Scotiabank’s view is that it would be surprising for the Bank to raise its inflation forecast in the October report without also raising rates. That is the key thing to watch: if the new Monetary Policy Report shows inflation staying above 2 per cent well into 2027, a hike becomes more likely, in October or December.

Two numbers before the decision

• September jobs report, Friday, October 9. Forecasts point to unemployment of about 6.5 per cent. Another big loss would make a hike harder to justify.
• September inflation, expected Monday, October 19. The headline number matters less than core inflation. If CPI-trim and CPI-median move up from about 2 per cent, oil is spreading into other prices, and that is what the Bank says it will act on.

We will update this page after each release and on decision day.

What a hike would cost you

Big-bank prime is 4.45 per cent. A quarter-point hike would take it to 4.70 per cent, and variable mortgage rates would rise by the same amount the next day. Here is the change in monthly payment on a variable mortgage at prime, with a 25-year amortization.

If your variable mortgage has a fixed payment, the amount you pay stays the same and more of it goes to interest. Fixed-rate borrowers are not affected until renewal, though fixed rates themselves may keep rising with bond yields.

What to do before October 28

• Renewing in the next four months? Get a rate hold now. It costs nothing and protects you if rates rise. Our guide to fixed or variable for a fall renewal works through the break-even.
• Buying? Get a pre-approval with a rate hold of 90 to 120 days. A higher rate also lowers how much you can borrow under the mortgage stress test.
• On a variable rate and nervous? Ask your lender what fixed rate you could convert to. You do not have to decide before October 28, but know the number.

Today’s best rates are on our 5-year variable mortgage rates page.

Questions about the October decision

When is the next Bank of Canada rate announcement?

October 28, 2026, at 9:45 a.m. Eastern. The last one of the year is December 9.

Will the Bank of Canada raise rates in October 2026?

It is a close call. Scotiabank and Oxford Economics expect a hike. RBC, TD, Desjardins and Capital Economics expect a hold. The September inflation report on October 19 is likely to decide it.

What is the Bank of Canada rate now?

2.25 per cent, unchanged since October 29, 2025. The prime rate is 4.45 per cent.

How much will my mortgage go up if rates rise 0.25 per cent?

About $14 a month for every $100,000 of a variable mortgage with a 25-year amortization.

Sources

• Bank of Canada, interest rate announcement, September 2, 2026, and summary of deliberations, September 16, 2026.
• Statistics Canada: Consumer Price Index, August 2026 (September 14); Labour Force Survey, August 2026 (September 4); GDP releases, August 28 and September 29, 2026.
• Economist forecasts: Canadian Press, September 18, 2026; Money.ca, October 8, 2026; Canadian Mortgage Trends, October 1 and 7, 2026; Yahoo Finance Canada, September 22, 2026.
• US Federal Reserve, FOMC statement, September 16, 2026.
• Payments calculated by Local Toronto with monthly compounding.

Local Toronto is not a mortgage lender or broker. This page is general information, not financial advice. HomeLife Landmark Realty Inc., Brokerage.