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Quick answer: The Bank of Canada raised its key rate by 0.25 points to 2.5%, its first increase since July 2023. Variable mortgages, HELOCs and lines of credit tied to prime will usually cost 0.25 points more within days. Fixed mortgages you already have do not change. New fixed rates follow bond yields, not today’s announcement directly. The Bank said it may raise rates again, and the next decision is December 9, 2026.
Key takeaways
- Every $100,000 of HELOC or line of credit balance costs about $21 more per month in interest.
- A $500,000 variable mortgage over 25 years costs about $66 more per month if your payment adjusts.
- If you have a pre-approval with a rate hold, check the expiry date this week.
- Renewing in the next 6 to 12 months? Start comparing options now, not when the letter arrives.
What happened and why
| Before today | After today | |
|---|---|---|
| Bank of Canada overnight rate | 2.25% | 2.50% |
| Bank Rate | 2.50% | 2.75% |
| Next decision | December 9, 2026 |
The Bank said inflation has been about 3% since April and is expected to reach about 3.5% by the end of the year, mainly because of high oil and fuel prices linked to the conflict in the Middle East. Inflation in September was 3.1%, but only 2.2% excluding gasoline. The Bank raised rates to stop high energy costs from spreading into the prices of everything else. It also said housing is expected to stay “relatively weak.”
What changes for you, product by product
1. Variable-rate mortgages
Variable rates are priced off your lender’s prime rate. Most big banks set prime about 2.2 points above the Bank of Canada rate, so prime typically moves from about 4.45% to about 4.70%. Watch for your lender’s notice.
There are two kinds of variable mortgages, and they react differently:
| Type | What happens after a hike |
|---|---|
| Adjustable payment (offered by many lenders and credit unions) | Your payment goes up, usually within a payment or two. |
| Fixed payment (offered by several big banks) | Your payment stays the same, but more of it goes to interest and less to principal. Your amortization stretches out. |
Not sure which one you have? Your mortgage statement or your lender’s app will say whether your payment changes when prime changes.
Example: $500,000 over 25 years at 3.45% is about $2,483 per month. At 3.70% it is about $2,549, so about $66 more.
If you have a fixed-payment variable mortgage: ask your lender how close you are to your trigger rate, the point where your payment no longer covers the interest. Most borrowers are far from it at today’s rates, but it is worth knowing your number.
2. Fixed-rate mortgages
- Your current fixed mortgage does not change until renewal.
- New fixed rates are priced off government bond yields. Those yields had already risen in September and October, so fixed rates had already moved up before today. The best 5-year fixed rates were recently quoted around the low 4% range.
3. HELOCs (home equity lines of credit)
HELOCs are usually prime plus a margin (for example, prime + 0.5%). Most are interest-only, so the increase shows up right away.
| HELOC balance | Extra interest per month (+0.25%) |
|---|---|
| $50,000 | about $10 |
| $100,000 | about $21 |
| $250,000 | about $52 |
What to do: if you have been carrying a HELOC balance for years, today is a good time to set up a fixed repayment plan, or move part of it into a fixed-rate term (many readvanceable mortgages allow this).
4. Personal lines of credit
Unsecured personal lines of credit are also tied to prime, often at prime + 2% to 5% or more. They rise by the same 0.25 points. Because the rate is already higher than a HELOC, this is usually the first debt to pay down.
5. Credit cards
Most credit card rates are fixed and do not move with the Bank of Canada. If you carry a card balance, it is still the most expensive debt you have.
What it means for buyers
- Pre-approval holders: most rate holds last 90 to 120 days. If yours expires soon, ask your broker to refresh it now. If rates rise again, a valid hold protects you.
- Qualifying: you must still qualify at the higher of your contract rate plus 2% or 5.25% (the federal stress test for most lenders). A small rate increase can trim your maximum budget slightly.
- The market: higher rates usually mean fewer buyers. In today’s GTA market, with plenty of listings, that can mean more room to negotiate on price and conditions.
What it means for existing homeowners
- Renewing within a year? You can usually renew or lock in a rate up to 120 days early without a penalty. Compare offers, and remember that switching lenders at renewal (same loan amount and amortization) no longer requires the stress test.
- On a variable rate and nervous? You can usually convert to a fixed rate without a penalty, but you will get the lender’s posted or offered fixed rate, which may be higher than today’s variable. Compare before switching.
- Feeling stretched? Talk to your lender before you miss a payment. Banks are expected under federal guidance to offer relief options such as extending amortization to borrowers facing hardship.
What it means for investors and landlords
- Variable-rate rental mortgages and HELOCs used for down payments now cost more. Re-run your monthly cash flow.
- Interest on money borrowed to earn rental income is generally tax-deductible. Interest on money used for personal spending is not.
Will rates keep going up?
The Bank said there “could be a need to increase the policy rate further,” and will decide one meeting at a time. TD Economics expects one more increase in early 2027. Nobody knows for sure. Plan for the possibility rather than trying to predict it.
Not sure what this means for your plans?
Buying, renewing or selling, I will walk you through your numbers and connect you with trusted mortgage professionals.
Or call/text (647) 709-2814 · I speak English, Hindi and Punjabi
FAQ
Did my fixed mortgage payment go up today?
No. A fixed rate stays the same for the whole term. The change only matters when you renew or take a new mortgage.
How much more will my HELOC cost?
About $21 more per month for every $100,000 you owe, if your HELOC is interest-only at prime plus a margin.
When is the next Bank of Canada decision?
December 9, 2026. The next full Monetary Policy Report is January 27, 2027.
Should I lock in my variable rate?
It depends on your budget and how much rate risk you can handle. Compare your lender’s fixed offer with your current variable rate and your renewal date before deciding.
Thinking of buying while others wait?
A slower market can mean better prices and better terms. Let’s look at what is available in your budget.
Or call/text (647) 709-2814 · Gursimran (Guru) Tamber, Sales Representative, CENTURY 21 People’s Choice Realty Inc., Brokerage
Keep reading
General information only, not mortgage, tax or financial advice. Rates and lender policies change, so confirm details with your lender or a licensed mortgage professional.
Sources: Bank of Canada press release, Oct 28, 2026 · MoneySense: rate decision coverage · TD Economics commentary
ABOUT THE AUTHOR
Gursimran (Guru) Tamber, Sales Representative
CENTURY 21 People’s Choice Realty Inc., Brokerage · RECO registration #5027219 · CENTURY 21 Pacesetter Gold (2024) and Masters Silver (2023) award winner
Guru helps buyers, sellers and investors across the GTA, Hamilton and Waterloo. Before real estate, he spent close to two decades leading IT transformation projects for Fortune 500 brands across Asia, Europe and North America. He speaks English, Hindi and Punjabi.
