For the first time in more than three years, the Bank of Canada has raised its policy interest rate.

Canada’s central bank announced Wednesday, October 28, that it’s increasing its key interest rate by 25 basis points to 2.5%. The move follows seven consecutive rate holds and marks the Bank’s first interest rate adjustment since October 29, 2025.

The last increase came on July 12, 2023, when the Bank raised its rate to 5%.

For prospective home buyers and homeowners, the announcement raises questions about borrowing costs, mortgage payments and whats next for Canadas housing market.

Why did the Bank of Canada raise its interest rate?

Much of the Bank’s reasoning comes down to one concern: inflation.

While Canada’s economy has performed better than expected, the ongoing conflict in the Middle East has kept global energy prices elevated. Beyond filling up your own vehicle’s gas tank, higher fuel costs make it more expensive for businesses to produce and transport goods.

Inflation has hovered around 3% since April and the Bank of Canada states its expected to reach approximately 3.5% by the end of 2026, above the Bank’s 2% target.

Meanwhile, Canada’s economy grew 3.3% in the second quarter, with growth estimated at roughly 2% in the third quarter. However, new U.S. tariffs could slow that momentum, and the Bank expects housing activity to remain relatively weak.

By raising interest rates, the Bank states it hopes to prevent higher energy costs from spreading further into the prices Canadians pay for everyday goods and services.

And another increase isn’t off the table. The Bank included this in its statement released on Wednesday.

What does the interest rate increase mean for Canadian home buyers and homeowners?

A quarter-percentage-point increase might not sound particularly large, but its effects depend on whether you’re buying a home, paying down a mortgage or approaching renewal.

For homeowners with fixed-rate mortgages

For Canadians with fixed-rate mortgages, there’s no immediate change to existing mortgage rates or scheduled payments.

Your rate is locked in for the duration of your term, whether that’s three years, five years or another length.

Fixed mortgage rates are influenced heavily by Government of Canada bond yields, which reflect broader financial conditions and expectations about future interest rates.

Bond yields have risen in recent months, prompting some lenders to increase their fixed mortgage rates. Unlike variable rates, a Bank of Canada increase doesn’t automatically mean fixed rates will rise.

What mortgage rates are available in Canada right now?

The Bank of Canada’s policy rate isn’t the same rate you’ll receive when applying for a mortgage.

Lenders determine mortgage rates based on market conditions, mortgage terms and individual financial circumstances.

Even before Wednesday’s announcement, rising bond yields had been pushing some fixed rates higher, while variable rates remained closely tied to lenders’ prime rates.

You can compare current mortgage offers through resources such as Ratehub.ca, but advertised rates can change quickly.

Ratehub is currently advertising the following featured rates:

Is your mortgage up for renewal soon?

If your mortgage term is ending within the next several months, it’s worth exploring your options early.

Your existing lender may send you a renewal offer, but you aren’t required to accept it without comparing what’s available elsewhere.

A mortgage broker or lender can help you compare rates and terms based on your circumstances.

Here’s what you need to know if your mortgage is up for renewal.

Will the Bank of Canada raise interest rates again?

That’s the question many Canadians will be watching over the coming months.

The Bank of Canada expects inflation to average around 3% in 2027 before returning to its 2% target around the middle of 2028.

With elevated energy prices, U.S. tariffs and uncertainty surrounding economic growth, future decisions will depend on how these pressures develop.

While additional increases remain possible, the Bank has indicated it intends to proceed carefully.

The next scheduled Bank of Canada interest rate announcement is December 9, 2026.

Why working with a REALTOR® is important

Interest rates are only one part of the home buying and selling equation.

Next Gen Realty Team can help you understand local market conditions, compare recent sales and assess available inventory.

Whether you’re buying or selling, our experience can help you make informed decisions about your next move, even as borrowing costs change.

Fall can be a good time to make a move, whether you’re buying or selling, but the picture depends on where you live.

The Canadian Real Estate Association’s (CREA) July forecast called for a more active second half of 2026, although it projects home sales for the full year to finish 1.4% below 2025. In August, national sales dipped 0.7% from July while new listings rose 3.3%.

If you’re thinking of listing your property this fall, there are a few simple things you can do to get your home ready to help it sell faster, easier, and at the highest price possible.

The advantages of selling in the fall

“The question isn’t so much whether buyers will return, but when. The reality is, buyers will come back when they feel conditions are favourable. All sellers can do is be ready for when that happens.

Luckily, while most homeowners think of spring as the ideal time to sell, the fall is actually a great time to list your home. Just some of the benefits of selling in the fall include:

September and October have consistently been busy times. Yes, that can mean more competition, but with more eyeballs, your home will benefit from broader exposure than in deep summer, when many Canadians tune out to enjoy the warmer weather.

What the market looks like heading into fall 2026

Canada’s housing market is entering fall without a dramatic shift in either direction, according to CREA. In August, national home sales edged down 0.7% from July, while new listings rose 3.3%. The national sales-to-new-listings ratio was 49.1%, within the range CREA generally considers consistent with balanced market conditions. Sales activity and price trends were largely unchanged for a fourth consecutive month in August.

For sellers, more listings could mean more competition for buyers’ attention. It’s a good reason to look closely at comparable homes in your neighbourhood before settling on a price, and to make sure your home is ready to show well from day one. The national numbers are a starting point; your REALTOR® can help you understand how many similar homes are for sale nearby and what buyers are responding to.

Looking ahead, CREA expects sales to be more active in the second half of 2026, following a weak first half, but that doesn’t mean every seller will see the same level of interest. That forecast is national, and conditions can look quite different from one neighbourhood to the next.

RBC Economics also expects a gradual recovery, but cautions that “the path is unlikely to be smooth or uniform across the country.” For sellers, that makes local comparable listings and realistic pricing especially useful conversations to have with a REALTOR® this fall.

Make a great first impression

Once you’ve decided to sell, work with your REALTOR® on a plan to get your home ready for buyers. A few things to focus on:

Stay on top of cleaning and upkeep

While fall leaves may be pretty to look at, they can also make a mess out of your otherwise pristine yard. If you have a showing or open house coming up, double check to make sure no one’s been tracking in any mud or dirt. To really maximize your curb appeal, don’t forget to consider what’s outside your home as well.

Fall means yards and gardens are approaching the end of their summer foliage. So clear out any flowers and plants that dry up in the fall, and stay on top of all those leaves. If you’re listing late in fall, consider adding some decorative outdoor plants that stay beautiful well into the colder weather, like decorative cabbage or black-eyed Susans.

Of course, the last thing you want to discover on a cool autumn evening right before a buyer is coming to see your home, is that your furnace is on the fritz! Since most of us don’t use our furnaces much in the summer, a fall listing can be a great occasion to have your HVAC system cleaned and inspected.

Put the latest technology to work for you

Between virtual and 3D tours, 360-degree views, and remote showings, the technology associated with selling a home has come a long way since the days of newspaper listings. If you plan to sell later in the year, get some outdoor photos done now, before the snow comes and the cooler weather hits. Even if you’re still prepping inside, it’s worth a little early effort to capture what the summer peak looks like.

While your own snapshots might be fine, ask your REALTOR® to bring in their professional photographer ahead of time. Have a rock-star backyard? It may be worth shooting some drone photography or video to really capture things before the cold hits.

Do your research before listing this fall

Because there may be fewer buyers in the fall compared to spring, it’s essential to stay on top of what’s happening in the market. This means having your REALTOR® do research on things like comparable listings in your area, tracking where your local housing market is headed, and understanding what buyers are looking for in a home right now.

Changing demand, buyer expectations and your competition will all impact your sale’s timing and strategy. The right strategy could change from one day to the next, but the most successful sellers are the ones who listen to what the market, and their REALTOR®, are telling them, and act swiftly.

Don’t get so stuck on a strategy, price or timing that you aren’t able to change it up to take advantage of opportunities,” he added. “Your REALTOR® will know when to jump and when to pivot. Listen to them.

Ask Eileen or Jesse

Lastly, when in doubt, ask your REALTOR® for advice! In addition to tracking the latest market statistics and keeping you informed about any future interest rate changes, your REALTOR® can walk you through each step in pricing, listing and getting your home ready to sell, and help you sell your property quicker, with less stress, and at the best price possible.