Canada's Rate Rose to 2.5%. A Fixed Mortgage Did Not Reset.

The Bank of Canada raised its overnight-rate target by 25 basis points on October 28, to 2.5%, with the Bank Rate at 2.75% and the deposit rate at 2.45%. Governor Tiff Macklem said it was the first increase since July 2023. Officials said CPI inflation has been around 3% since April because oil prices and refinery margins are high, and they expect it near 3.5% by year-end. Excluding gasoline, September inflation was 2.2%. The Bank projects growth of 1% in 2026 and 2% in both 2027 and 2028, and said another increase may be needed but that it will proceed carefully. A higher policy rate can lift variable-rate loans and new fixed offers. It does not rewrite a mortgage payment that is already fixed.

Will the October 28 hike raise a Canadian mortgage already locked in? No. The Bank changed its policy rate, not existing fixed contracts. Variable-rate loans and new offers can move if lenders follow the higher rate.