10/25/2026
🙄The Bank of Canada is widely expected to raise its benchmark interest rate to 2.50% on Wednesday, October 28, to combat rising inflation.
Here is what you need to know:
Why is inflation going up? Prices rose 3.1% over the past year in September (up from 3.0% in August). Gasoline was the main culprit, soaring 27.8% from last year—without gas, inflation was only 2.2%.
Why do variable rates change? If you have a variable-rate mortgage, your interest rate is directly tied to the Bank of Canada's benchmark rate. When the central bank raises its rate, your rate goes up automatically, meaning higher monthly payments or more of your money going toward interest instead of paying down your home.
Why have fixed rates already gone up? Fixed rates are based on the government bond market, where investors trade debt. Because investors saw higher inflation coming and expected interest rates to rise, bond yields went up first—causing banks to raise their fixed mortgage rates ahead of time.
What does the Central Bank's announcement mean? Raising interest rates makes borrowing money for things like credit cards, loans, and mortgages more expensive. The Bank of Canada does this on purpose to slow down consumer spending and cool off high inflation.
