On Wednesday, October 28, 2026, the Bank of Canada raised its policy rate by a quarter of a percentage point, from 2.25% to 2.50%. It was the Bank’s first increase since July 2023, ending seven straight holds. Here’s what changed, what it costs and what to do before December 9.
The Bank Rate is now 2.75% and the deposit rate is 2.45%. RBC’s prime rate rose from 4.45% to 4.70%, effective October 29. TD also lists prime at 4.70%. Check the specific prime rate used in your mortgage contract, as lender benchmarks can differ.
If you have a variable-rate mortgage or a home equity line of credit, your interest rate generally follows your lender’s applicable prime rate. The timing of a payment change depends on your contract.
Why the Bank moved
The Bank’s October 28 announcement points to persistent energy costs and the risk of those costs spreading into other prices. It projects inflation around 3.5% at year-end, averaging 3% in 2027 and returning to 2% in mid-2028. These are forecasts, not promises.
Officials signalled that further increases may be needed but will proceed carefully. The next scheduled decision is Wednesday, December 9, 2026.
What it actually costs
A quarter point sounds small. On a large mortgage, it is not nothing, but it helps to put a real number on it.
For illustration, a $400,000 mortgage with 20 years remaining would cost about $51 more per month if its rate rose from 3.70% to 3.95%. A $500,000 balance with 25 years remaining would cost about $67 more per month. These calculations assume monthly payments and nominal rates compounded semi-annually. Your lender’s calculation may differ.
With an adjustable payment, the monthly amount can increase. With a fixed-payment variable mortgage, more of each payment may go to interest and less to principal instead. Check your lender’s notice rather than assuming your payment will rise by the headline example.
Fixed rates are a different story. An existing fixed-rate mortgage does not automatically change with this announcement. New fixed-rate offers are influenced by bond yields and lender pricing. For a variable contract priced at prime minus 0.75%, a prime increase from 4.45% to 4.70% would move the rate from 3.70% to 3.95%; that is an example, not a current offer.
Why this lands hard in the GTA
This hike arrives in a cautious market. TRREB reported 5,040 GTA home sales in September 2026, down 9% from a year earlier. The average selling price was $1,006,409, down 5.1%.
TRREB’s message was that buyer demand exists, but employment security and confidence in long-term borrowing costs matter. A hike can give households another reason to revisit their numbers before making an offer.
For Newmarket and East Gwillimbury, larger family-home mortgages can make even a small rate change more noticeable in dollars. That does not mean every property will lose value by the same amount. Recent comparable sales, competing listings and the condition of the home still matter.
For more local context, read our September Newmarket and East Gwillimbury market update.
What to do now
If you’re buying: Ask your lender or broker about a rate hold and its expiry date. Confirm which rate it protects, whether a lower rate can be requested before closing and what conditions apply. Compare fixed and variable options using your actual budget and tolerance for another increase.
If your mortgage renews soon: Start comparing offers now. Ask whether your payment or amortization will change and whether qualification requirements apply to your particular renewal or lender switch. Do not assume every renewal faces the same stress-test rules.
If you’re selling: A hike can extend buyer caution. It does not establish a new value for your home on its own. Price against current comparable sales and the homes buyers can choose from today. Review showing activity and feedback before deciding whether a price adjustment is needed.
The December 9 decision is the next checkpoint. Use the time before it to confirm your financing and make a realistic plan.
Plan your next move
Wondering what higher rates mean for your next move in Newmarket or East Gwillimbury? Call Nikolay and Tatiana at 647-833-3287. We’ll help you understand your options and make a plan for buying or selling.
Nikolay and Tatiana Real Estate Team
Right At Home Realty Investments Group Brokerage