October 28, 2026 Policy Rate Decision: What It Can (and Cannot) Change for Your Mortgage
The policy rate is 2.25% ahead of the October 28 announcement. Fixed rate, variable rate, renewal: what reacts to the Bank of Canada decision, what does not move, and five questions to ask your lender.
On October 28, 2026, the Bank of Canada will announce its next policy rate decision, along with its Monetary Policy Report. This article, written on October 22, does not try to predict that decision. It explains what a change (or no change) can affect in your mortgage, and which questions to ask your lender.
In brief
- The Bank of Canada's policy rate is currently 2.25%. It was left unchanged at the September 2, 2026 decision.
- The next announcement is on October 28, 2026, with the Monetary Policy Report.
- A variable rate can change during your term; a fixed rate stays the same for the whole term (FCAC).
- If your mortgage is at a fixed rate, the decision does not change your current rate. It may, however, influence what you are offered at renewal.
- No article replaces advice from your lender or a mortgage broker.
- 2.25%
- current policy rate (unchanged on September 2, 2026)
- October 28
- next announcement, with the Monetary Policy Report
Where is the policy rate?
According to the Bank of Canada, the policy rate (the target for the overnight rate) is 2.25%. At its last decision, on September 2, 2026, the Bank left it unchanged. Its 2026 calendar schedules the next announcement for October 28.
To find out what was decided, see the "Policy interest rate" page of the Bank of Canada website after October 28: this article does not contain the outcome.
Variable rate, fixed rate: what reacts to the decision
The Financial Consumer Agency of Canada (FCAC) points out that a fixed rate stays the same throughout your term, whereas a variable rate may change during your term. Each lender sets its own rate, taking into account several factors, including the length of the term, its current prime and posted rates, eligibility for a discount, the type of rate chosen and your credit history.
- Variable rate: it is often offered as "the lender's prime rate plus a percentage". Lenders generally adjust their prime rate in line with the policy rate, but each sets its own.
- Fixed rate during your term: your rate does not change, whatever the Bank decides.
- Fixed rate offered today: it depends on several factors set by the lender and can therefore move without the Bank of Canada changing its policy rate.
Your situation
Your term ends soon
Every time you renew, you renegotiate your rate, so your payments could be higher or lower (FCAC). Compare your lender's offer with other offers rather than accepting the first one, and check the penalty conditions if you change lender or product.
You have a variable rate with fixed payments
According to the FCAC, when rates rise, a growing share of your payment goes to interest. The "trigger rate" is the rate at which the payment only covers interest: the lender may then require higher payments, an extra payment or conversion to a fixed rate. Ask your lender what yours is.
You want to buy
A mortgage pre-approval pins down your real budget and makes your promise to purchase more credible, especially when there are multiple offers. Ask how long the pre-approved rate is guaranteed.
You want to sell
The cost of credit influences what buyers can pay. It is part of the context to consider when setting a realistic starting price, along with comparable sales and competing supply.
Five questions to ask your lender or mortgage broker
- What rate are you offering me for renewal, and until what date is it guaranteed?
- What would my penalty be if I pay off or change lender before the end of the term?
- Does my variable rate have a trigger rate, and at what level?
- How does your prime rate follow Bank of Canada decisions?
- What difference in monthly payment do I get with a shorter or longer term?
What no one can know
Neither the October 28 decision nor the path of mortgage rates over the coming months can be predicted with certainty. Rather than betting on the next announcement, it is more useful to know your renewal date, your budget flexibility and your renewal options.
Frequently asked questions
Does the policy rate change my current fixed rate?
No. A fixed rate stays the same throughout your term (FCAC). The decision may, however, influence the rates lenders offer when you renew.
Does my variable rate change right after the decision?
It depends on your lender and your contract. A variable rate is often set from the lender's prime rate, which the lender generally adjusts after a Bank of Canada decision. Check how your lender applies changes.
Should I renew before or after October 28?
No one can know in advance. What matters is your renewal date, the offers available and the conditions (how long the rate is guaranteed, penalties). A mortgage broker can compare several lenders for you.
Does the policy rate affect house prices?
The cost of credit is one of the factors that determine what buyers can pay, but not the only one: supply, employment and household confidence also count. In the Montreal CMA, sales are down 12% in Q3 2026 while median prices edge up, according to QPAREB.
Sources, method and limits
Sources: Bank of Canada "Policy interest rate" page (2.25% rate, September 2, 2026 decision, calendar with an announcement on October 28), consulted on October 22, 2026; Financial Consumer Agency of Canada (FCAC) pages on mortgage interest; QPAREB (APCIQ) release of October 14, 2026. Written by Équipe Lefrançois.
Limits: this article is educational. It contains no mortgage rate, no forecast and no personalized financial advice. For your situation, speak with your lender or a mortgage broker. It was written before the October 28, 2026 decision: check the Bank of Canada website for the outcome.
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