The Bank of Canada raised its policy rate by a quarter point to 2.50% on October 28. It is the Bank's first increase since July 2023. The reason is inflation: CPI inflation has been around 3% since April, pushed up by persistently high oil prices, and the Bank now expects it to rise to about 3.5% by the end of the year.
Here is what that means if you are buying, selling or renewing a mortgage in Calgary. For the background going into today, see my October 28 preview.
What changes right away?
Variable rate mortgages and lines of credit move with prime. The big banks raised prime from 4.45% to 4.70%, effective October 29, so watch for your lender's notice. On a $400,000 mortgage over 25 years, a quarter point adds about $55 a month. If you have a fixed payment on a variable rate, your payment may not change, but more of each payment now goes to interest.
What happens to fixed rates?
Fixed rates follow the Government of Canada 5-year bond yield, not the Bank. That yield was already 3.59% on October 6, up from 2.75% a year earlier, which is why fixed rates have not come down this year. The Bank noted that bond yields in advanced economies have moved higher since July. Today's decision does not set fixed rates on its own, but if markets start pricing in more increases, fixed rates could drift up over the coming weeks.
Is another increase coming?
Possibly. The Bank said there could be a need to raise the rate further, but that given the uncertainty it will proceed carefully. Excluding gasoline, inflation was 2.2% in September and core measures remain close to 2%. Unemployment has been around 6.5% for several months, and new U.S. tariffs are expected to slow growth in the fourth quarter. The Bank expects CPI inflation to average 3% in 2027 and return to 2% by the middle of 2028. The next decision is December 9.
What if I am buying?
If you have a pre-approval with a rate hold, it protects you from today's move. If not, get one now. Calgary's condo and townhome market still favours buyers (CREB®, September 2026), and the price you negotiate matters more to your payment than a quarter point. First-time buyer? See my First-Time Home Buyer in Calgary guide, and start with the basics on my mortgage and finance page.
What if I am renewing?
If your mortgage renews in the next six months, ask for a renewal rate hold now and compare lenders before you sign. Run fixed against variable on your actual numbers, not on headlines.
What if I am selling?
Higher rates trim what some buyers qualify for, especially at entry-level price points. Pricing to today's competition matters more than ever.
The bottom line
One quarter point will not change most plans, but it is a signal to check yours. As both a REALTOR® and a Mortgage Associate, I can stress test your payment and your timeline in one conversation. Book a call or read more about the dual licence.
Sources: Bank of Canada, October 28, 2026 rate announcement; CREB® September 2026 statistics release.
More from the blog: Bank of Canada October 28: What a Hold, Cut or Hike Means for Calgary Buyers · Calgary Housing Market, September 2026: Detached Holds, Condos Soften
Pete Chapman, REALTOR® with REMAX Innovations and Mortgage Associate with Dominion Lending Centres Mortgages Are Marvellous, independently owned and operated. Rates are subject to change and qualification. This is general information, not financial advice.
