Bank of Canada Raised Its Rate to 2.5%. Fixed Loans Did Not Reset.

The Bank of Canada raised its overnight rate by 25 basis points to 2.5% on October 28, but that decision does not rewrite a fixed-rate mortgage contract. The Bank Rate is now 2.75%, and the deposit rate is 2.45%. Governor Tiff Macklem said this was the first increase since July 2023.

The Bank said CPI inflation has been around 3% since April and is expected to reach about 3.5% by the end of 2026. Excluding gasoline, September inflation was 2.2%, and core measures remain close to 2%. It projects inflation averaging 3% in 2027 and returning close to 2% by mid-2028. Those paths are forecasts, not new price measurements.

A higher policy rate can affect variable-rate loans and new borrowing. The Bank said another increase might be needed, but that it would proceed carefully. Growth is projected at 1% in 2026 and 2% in 2027 and 2028, and unemployment has been around 6.5%. The next announcement is scheduled for December 9.

Does the October 28 hike raise a fixed-rate mortgage payment you already have? No. The Bank changed the policy rate to 2.5%. An existing fixed payment stays at its contract rate, and no new retail mortgage quote was published.