Blog > Bank of Canada October 28 Decision: Hike to 2.50% or Hold? What It Means for Markham Owners Renewing
Bank of Canada October 28 Decision: Hike to 2.50% or Hold? What It Means for Markham Owners Renewing
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The Bank of Canada announces its next rate decision on Wednesday, October 28, 2026 at 9:45 a.m. ET. The policy rate has been 2.25% since October 2025. With September inflation at 3.1%, the choice is between holding at 2.25% and a quarter-point hike to 2.50%. A hike would raise prime and variable-rate payments right away. Fixed rates follow bond yields, which have already risen. Markham owners renewing a 2021 five-year fixed mortgage are likely to see a much higher payment either way.
If your mortgage renews in the next year, October 28 matters. For many Markham families who bought or refinanced in 2021, renewal means moving from a rate near 2% to something closer to 4% or more.
This guide explains what the Bank of Canada is weighing, what a hold or a hike would change, and how to prepare for renewal with real numbers.
Michael John Lau is one of Markham's top real estate agents, with 430+ homes sold, a 5.0 rating across 81 Google reviews, and eXp ICON Agent awards in 2024 and 2025. Many of his past clients bought in 2021 and are renewing now, so he tracks these decisions closely and shares the plain-language version here.
| Rate snapshot | Level |
|---|---|
| Bank of Canada policy rate | 2.25% (since Oct 29, 2025) |
| Prime rate | 4.45% |
| September 2026 CPI (headline) | 3.1% |
| CPI-trim / CPI-median (core) | 1.8% / 1.9% |
| Government of Canada 5-year yield (Oct 21) | 3.62% |
| Best advertised 5-year fixed (insured) | 4.34% |
| Big bank discounted 5-year fixed (average) | about 4.69% |
| Best advertised 5-year variable | 3.43% (prime − 1.02%) |
Key takeaways
- Decision date: Wednesday, October 28, 2026, 9:45 a.m. ET, with a new Monetary Policy Report.
- Policy rate: 2.25%, unchanged through six 2026 decisions.
- September CPI: 3.1% headline, but core measures near 1.8% to 1.9%.
- A hike to 2.50% would add about $66 a month to a $500,000 variable mortgage at a 3.43% rate.
- A 2021 five-year fixed borrower renewing could see payments rise roughly 23% to 30%.
What is the Bank of Canada weighing?
Headline inflation rose to 3.1% in September, from 3.0% in August, pushed up by gasoline prices that were 27.8% higher than a year earlier. Excluding gasoline, inflation was 2.2%, and the Bank's preferred core measures eased to 1.8% (CPI-trim) and 1.9% (CPI-median).
At the same time, the job market is soft. September saw a loss of 68,000 jobs and unemployment of 6.5%. That mix is why the decision is close. In mid-October, Governor Macklem said the Bank's inflation outlook would likely be revised higher, and market pricing swung toward a hike. Several big-bank economists, including TD and RBC, still expected a hold.
Hold or hike: what changes for you?
- If the Bank holds at 2.25%: prime stays at 4.45%. Variable payments do not change. Fixed rates still move with bond yields.
- If the Bank hikes to 2.50%: prime would likely rise to about 4.70%. Variable-rate payments rise, or for fixed-payment variable mortgages, more of each payment goes to interest.
Example: on a $500,000 variable mortgage with a 25-year amortization, moving from 3.43% to 3.68% raises the monthly payment from about $2,478 to about $2,544, roughly $66 more a month.
What does renewal look like for a 2021 buyer?
A Bank of Canada staff analysis found that about 60% of outstanding mortgages renew in 2025 or 2026, and five-year fixed borrowers renewing in 2026 face average payment increases of about 20%.
Here is a Markham-style example. A $600,000 mortgage taken in 2021 at about 2% with a 25-year amortization costs about $2,538 a month. After five years the balance is about $502,500. Renewing that balance for the remaining 20 years:
| Renewal rate | New monthly payment | Change |
|---|---|---|
| 4.34% | $3,126 | +$588 (+23%) |
| 4.69% | $3,219 | +$681 (+27%) |
| 4.94% | $3,286 | +$748 (+29%) |
Illustrative example using Canadian semi-annual compounding. Your rate depends on your lender, credit, loan size and insured status.
How to prepare for your renewal
- Start early. Many lenders let you lock a renewal rate about 120 days before maturity.
- Shop around. Since November 21, 2024, uninsured borrowers who switch lenders at renewal without increasing the loan amount or amortization do not need to pass the stress test again.
- Compare terms, not just rates. Shorter terms, variable rates and prepayment options all change your risk.
- Review your budget. Build in the new payment now, so the change is not a surprise.
- Know your options. If the payment is too high, a longer amortization may be possible with some lenders.
The stress test for new uninsured mortgages still applies: you must qualify at the greater of your contract rate plus 2% or 5.25%.
What it means for the Markham market
Rate uncertainty is one reason TRREB described GTA buyers as being in a holding pattern in September. In Markham, 245 homes sold and the MLS HPI composite benchmark was $1,052,500, down 6.02% from a year earlier. A hold could support buyer confidence. A hike could keep some buyers waiting a little longer.
If renewal pressure is making you rethink your home, it is worth seeing what your options are. Read should I sell before spring 2027? or start with a free home evaluation.
General information only, not financial, legal or tax advice. Figures are from the sources listed and may change.
Frequently asked questions
When is the next Bank of Canada rate announcement?
Wednesday, October 28, 2026, at 9:45 a.m. ET, along with a new Monetary Policy Report. The final decision of 2026 is scheduled for December 9.
What is the Bank of Canada rate now?
The policy rate is 2.25%. It was cut to that level on October 29, 2025 and has been held at every 2026 decision so far.
Will the Bank of Canada raise rates on October 28, 2026?
It is a close call between a hold and a hike to 2.50%. Big-bank economists mostly expected a hold, while market pricing moved toward a hike after the Governor said the inflation outlook would likely be revised higher.
How much will my payment rise if rates go up 0.25%?
On a $500,000 variable mortgage with a 25-year amortization, a move from 3.43% to 3.68% adds about $66 a month.
Do I need to pass the stress test to renew?
Not if you renew with your current lender. Since November 21, 2024, uninsured borrowers who switch lenders at renewal without increasing the loan or amortization are also exempt.
What are mortgage rates in Canada right now?
As of October 23, 2026, the best advertised 5-year fixed rate was about 4.34% for insured mortgages and the best 5-year variable was about 3.43%. Big-bank discounted 5-year fixed rates averaged about 4.69%.
Talk to a Markham REALTOR® who knows these streets
Renewing soon and wondering about your options? Michael John Lau can show you what your home is worth today so you can plan your next step with clear numbers.
Call (416) 700-0286Free home evaluationKeep reading
Sources
- Bank of Canada: Policy interest rate
- Bank of Canada: 2026 announcement schedule
- Statistics Canada: Consumer Price Index, September 2026
- Bank of Canada Staff Analytical Note 2025-21 (mortgage renewals)
- OSFI: Minimum qualifying rate for uninsured mortgages
- Ratehub: Best 5-year fixed mortgage rates
- Ratehub: Best variable mortgage rates
- Bank of Canada: Government of Canada bond yields
- TRREB news release, October 6, 2026
Information is accurate to the best of our knowledge as of October 23, 2026 and may change. Not intended to solicit buyers or sellers currently under contract.
