Blog > What Does the Next Bank of Canada Rate Decision Mean for Markham Buyers?
What Does the Next Bank of Canada Rate Decision Mean for Markham Buyers?
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What does the next Bank of Canada rate decision mean for Markham buyers?
The Bank of Canada announces its next rate decision on 28 October 2026. Its policy rate has been 2.25% for seven straight decisions, and the big-bank prime rate is 4.45%. In September, the Bank said upside risks to inflation had grown and that it was prepared to raise rates if tariff costs spread into everyday prices. For Markham buyers, a hold changes little, a hike would raise variable-rate payments right away, and a cut would lower them. Fixed rates move more with bond markets than with the Bank’s decision. On an $800,000 mortgage, each quarter-point move changes the payment by roughly $110 a month. Buyers should plan for their payment, not try to time the Bank.
Where Rates Stand Now
On 2 September 2026, the Bank of Canada held its overnight rate at 2.25%, its seventh hold in a row since October 2025. The Bank pointed to a broadening recovery, with GDP growing 3.3% in the second quarter, but warned that uncertainty is high and new US tariffs pose risks.
Inflation has hovered around 3%, mainly because of gasoline prices. Excluding gasoline, inflation was 2.2%, and core inflation stayed close to 2% in July. The Bank said upside risks to inflation had increased and that it was prepared to raise rates if tariff-driven costs spread into everyday prices.
Michael John Lau, a REALTOR® with the Kaizen Real Estate Team, one of the most active real estate teams in Markham and York Region, encourages buyers to have a lender pre-approval in place before rate announcements, so a change does not catch them in the middle of an offer.
Three Possible Outcomes on 28 October
| Decision | Variable-rate mortgages | Fixed-rate mortgages | What buyers may notice |
|---|---|---|---|
| Hold at 2.25% | No change; prime stays at 4.45% | Move with bond yields | Little change in what you qualify for |
| Hike | Payments or interest costs rise soon after | May already reflect expectations | Slightly less borrowing power; some buyers pause |
| Cut | Payments or interest costs fall | May have moved already | More buyers return, which can mean more competition |
Why do fixed rates behave differently? Lenders price most five-year fixed mortgages based on Government of Canada bond yields, which react to inflation data, global markets and expectations about future Bank decisions. That is why fixed rates sometimes rise or fall before an announcement, and sometimes barely move after one.
Rate decisions are not predictable with certainty, and economists often disagree. The Bank’s own message in September leaned toward caution about inflation, not toward cuts.
What a Quarter Point Means for Your Payment
Here is a simple example for an $800,000 mortgage with a 25-year amortization. The rates are examples only, not quotes.
| Mortgage rate | Approximate monthly payment | Change |
|---|---|---|
| 4.00% | $4,208 | |
| 4.25% | $4,317 | About $109 more |
| 4.50% | $4,428 | About $220 more |
Over a year, a quarter point on this mortgage is about $1,300 in payments. That matters, but it is small compared with choosing the right home, the right price and the right mortgage term. To test your own numbers, use the mortgage calculator below.
Want to know what a rate change means for the homes you are looking at? Call Michael John Lau, REALTOR®, at (416) 700-0286 to review prices and payments in your target neighbourhood.
How the Stress Test Affects What You Can Borrow
Lenders do not qualify you at the rate you will pay. For uninsured mortgages, the Office of the Superintendent of Financial Institutions (OSFI) requires federally regulated lenders to test you at the greater of your contract rate plus 2%, or 5.25%.
- If your contract rate is 4.00%, you must qualify at 6.00%.
- If a rate change moves your contract rate to 4.25%, you must qualify at 6.25%.
That is why even a small rate change can shift your maximum budget. If you are working out your price range, how much you need to earn to buy a house in Markham explains how income, debts and the stress test work together.
If You Are Renewing in 2026 or 2027
Many Markham owners who locked in low rates in 2021 and 2022 are renewing now. A few points to keep in mind:
- Shop your renewal. OSFI does not require lenders to apply the stress test to an uninsured straight switch at renewal, as long as you do not increase the loan amount or amortization.
- Compare terms, not only rates. Prepayment options and penalties matter if you may sell or move during the term.
- Plan ahead. Many lenders send renewal offers months before maturity, which gives you time to compare.
Speak to your lender or a mortgage professional about the right term for your situation.
What Markham Buyers Should Do Now
- Get pre-approved. Ask your lender how long it will hold your rate.
- Budget at a higher rate. Make sure the payment still works if rates rise a little.
- Use the market, not the forecast. Markham had about 9 months of inventory in September 2026, so buyers have room to negotiate today. See whether Markham is a buyer’s market right now.
- Know your down payment. How much down payment you need in Markham covers the minimums by price.
Ultimately, the decision is yours. The goal is to make sure you have all the information.
Next Steps
- Use the mortgage calculator: see how a rate change affects your payment.
- First-time buyer services: a step-by-step plan from pre-approval to keys.
- Buying a home in Markham: how Michael helps buyers negotiate in today’s market.
Frequently Asked Questions
When is the next Bank of Canada rate decision?
The next scheduled announcement is on 28 October 2026. The Bank held its policy rate at 2.25% on 2 September 2026.
What is the prime rate in Canada right now?
The prime rate at Canada’s major banks was 4.45% as of 2 October 2026. Variable-rate mortgages are usually priced as prime plus or minus a set amount.
Will the Bank of Canada raise rates in October 2026?
No one can say for certain. In September, the Bank said upside risks to inflation had increased and that it was prepared to raise rates if tariff costs spread into everyday prices.
How much does a quarter-point rate change affect my mortgage payment?
On an $800,000 mortgage with a 25-year amortization, a quarter-point change moves the monthly payment by roughly $110. The exact amount depends on your rate, balance and amortization.
What is the mortgage stress test in Canada?
For uninsured mortgages, federally regulated lenders must qualify borrowers at the greater of the contract rate plus 2%, or 5.25%. It is designed to make sure borrowers can handle higher rates.
Should I wait for rates to drop before buying in Markham?
Waiting may or may not pay off, since rates and prices can both change. Buying makes the most sense when the payment fits your budget and the home fits your long-term plan.
Work With Michael John Lau in Markham
Michael John Lau helps Markham buyers turn rate news into a clear plan. That means connecting you with your lender early, setting a price range that still works if rates move, and negotiating with today’s market conditions in mind. The goal is to buy with confidence, not to guess the Bank of Canada.
📞 Contact Michael John Lau, REALTOR®
🌐 www.callmikelau.com
Buying in Markham this fall?
Michael John Lau helps buyers set a price range that works with today’s rates and negotiate with the market on their side.
Michael John Lau, REALTOR® · Markham, Ontario · (416) 700-0286
Disclaimer. Michael John Lau is a licensed REALTOR® serving buyers and sellers in Markham, Ontario and the Greater Toronto Area. Rate information is from the Bank of Canada announcement of 2 September 2026. The prime rate is as reported by Ratehub.ca on 2 October 2026. Stress test rules are from OSFI. Payment examples are approximate, use Canadian semi-annual compounding and are for illustration only. This article is general information, not financial advice. Speak to a lender or mortgage professional about your own situation.