The Bank of Canada Raised Rates: What It Means for GTA Buyers, Sellers and Owners

By Jatin Dua · Broker of Record, RE/MAX Quantum Realty · Updated 2 November 2026 · 10 min read — The Bank of Canada raised its rate to 2.50% on 28 October 2026. Here is what it means for GTA buyers, sellers and homeowners.

This guide is for anyone in Toronto or the wider GTA who is buying, selling or carrying a mortgage after the Bank of Canada’s rate increase on 28 October 2026. You will get the plain facts of the decision, worked payment examples, and what the change means for each group as of November 2026.

What did the Bank of Canada do on October 28, 2026?

The Bank of Canada raised its policy interest rate by 0.25 percentage points, from 2.25% to 2.50%. This is the overnight rate that banks use when they lend to each other for one day. It was the first increase in more than three years. Before this, the rate had stayed at 2.25% for close to a year after a long run of cuts.

The big banks moved the next day. RBC, TD, National Bank and others raised their prime rate from 4.45% to 4.70%, effective 29 October 2026. Prime is the base rate lenders use to price variable-rate mortgages and home equity lines of credit (HELOCs). So if your rate is “prime minus” or “prime plus” something, it went up by 0.25 points too.

Source: Bank of Canada press release, 28 October 2026; National Bank of Canada and TD prime rate notices, October 2026.

Why did the Bank of Canada raise interest rates?

The short answer is energy prices. The conflict in the Middle East has run for about eight months, and oil and refining costs have stayed high. That pushes up fuel and shipping costs for businesses. The Bank raised rates to stop those high energy prices from spreading into the price of everything else.

Here is what the Bank said in its statement:

• Consumer price inflation has been close to 3% since April and was 3.1% in September 2026. The Bank expects about 3.5% by the end of 2026.
• Without gasoline, inflation was 2.2% in September, and the Bank’s core measures are near 2%. That is why some economists think the problem is narrow.
• The Bank expects inflation to average about 3% in 2027 and get back to its 2% target by mid-2028.
• Growth is forecast at about 1% in 2026 and 2% in both 2027 and 2028. Unemployment has been near 6.5% for months.
• The Bank expects the housing market to stay fairly soft.

Governor Tiff Macklem said the rate may need to go higher, but the Bank will move carefully and decide one meeting at a time.

How much does a 0.25% rate hike add to a mortgage payment?

On a typical GTA mortgage, a quarter-point increase adds roughly $55 to $140 a month, depending on the balance. The table below is an illustration only. It assumes a variable rate of prime minus 0.30%, which matches one big bank’s advertised variable offer in early November 2026, a 25-year amortization (the time to pay the loan off in full), and monthly payments that adjust with prime.

Source: my calculations, semi-annual compounding, 25-year amortization, rounded. Illustration only; your lender’s numbers will differ slightly.

If you have a fixed-rate mortgage, your payment does not change today. The hike reaches you when your term ends and you renew. If you have a HELOC, the interest on a $100,000 balance goes up by about $21 a month for every 0.25 points.

What does the rate hike mean for GTA home buyers?

For buyers, the hike does two things. It raises the payment on any new variable mortgage, and it can lower how much you qualify for.

Every federally regulated lender must test you at a higher “qualifying rate.” For an uninsured mortgage, that rate is the greater of 5.25% or your contract rate plus 2 points. With variable rates now above 3.25%, the “plus 2” part is what applies to most buyers. So when the contract rate goes up 0.25, the qualifying rate goes up 0.25 as well. My full explainer on how the mortgage stress test works walks through the maths.

Source: OSFI minimum qualifying rate rule; my calculations. Illustration only, ignoring taxes, condo fees and other debts that lenders also count.

Fourteen thousand dollars will not break most purchases. But if you were pre-approved before 28 October and are shopping at the very top of your budget, ask your lender to re-run your numbers. A rate hold protects the rate you were quoted for a set period, but it does not always lock in the approval amount.

Is it a good time to buy a house in the GTA after the rate hike?

There is no single answer, but prices are softer than a year ago, and that partly offsets the higher rate. Detached and condo medians are down in most of the GTA so far in 2026, and homes are taking a little longer to sell.

Source: TRREB MLS data via REALM, January–October 2026 vs the same period of 2025. Medians and averages for the year to date, not forecasts.

Across the whole GTA, TRREB reported 5,040 sales in September 2026, down 9% from a year earlier, with an average price of $1,006,409, down about 5%. New listings fell 14.4%. TRREB described buyers as being in a holding pattern. For a buyer with a secure job, that means more time to compare homes and more room to negotiate than in recent years. For help setting a ceiling, see my guide to how much home you can afford in the GTA.

What does the rate hike mean for sellers?

Sellers feel a rate hike through buyers. When payments rise and qualifying amounts fall, some buyers step back and others lower their offers. With medians already down and days on market up, a small hike adds to caution rather than changing the market overnight.

What matters most for a seller in late 2026 is pricing to today’s sales, not to last year’s. In my experience, the homes that sell are priced against the last 60 to 90 days of real sales on similar streets and buildings, and they are clean, well lit and easy to view. A home priced on hope tends to sit, and a stale listing usually sells for less in the end. My step-by-step method for pricing a home to sell in Toronto covers this.

What should current homeowners do after the rate hike?

What to do depends on the type of mortgage you have. The Financial Consumer Agency of Canada (FCAC), the federal consumer watchdog for banks, explains that variable mortgages come in two styles.

• Adjustable-payment variable: your payment goes up when prime goes up. You will see a higher payment soon after 29 October. The plus side is that your principal keeps going down on schedule.
• Fixed-payment variable: your payment stays the same, but more of it goes to interest and less to principal. If rates rise far enough, the payment may no longer cover the interest. The FCAC calls that level the trigger point. Your lender will then raise your payment or ask for a lump sum.
• Fixed rate: nothing changes until renewal. If you renew in 2027, start comparing offers several months early.
• HELOC: the rate rose 0.25 points. If you carry a balance, it now costs more each month.

Will the Bank of Canada raise rates again in December 2026?

Nobody knows yet, and economists are split. The next decision is on 9 December 2026. Here is what forecasters were saying right after the hike:

• Markets priced about a 43% chance of another 0.25 increase in December, according to LSEG data reported by The Canadian Press on 28 October.
• RBC chief economist Frances Donald said she expects another hike in December or January, and that RBC projects three more increases in total.
• Desjardins economists expect one more hike before the cycle ends, with timing depending on the data.
• In a Reuters poll taken just before the decision, most economists who answered expected one more hike by the end of March 2027, then a hold at 2.75%.

These are forecasts, not promises. Energy prices, U.S. tariffs and job numbers can change the picture quickly.

Do fixed mortgage rates go up when the Bank of Canada raises rates?

Not directly. Fixed rates follow Government of Canada bond yields, which move with what investors expect for inflation and future rate decisions. Bond yields rose through September and October 2026, and fixed mortgage rates rose with them, before the hike was even announced. When I checked on 2 November 2026, RBC’s advertised special rate for a five-year fixed was 5.14%, while its five-year variable offer was prime minus 0.30%, or 4.40%. Posted rates were higher. For a deeper comparison, read my guide to choosing fixed or variable.

What to do next

1. Find your mortgage type on your last statement: fixed, adjustable-payment variable or fixed-payment variable. Note your renewal date.
2. If you are buying, ask your lender to re-run your pre-approval at the new rate before you make an offer.
3. If you are selling, get a price opinion based on the last 60 to 90 days of real sales near you, not on 2025 prices.
4. If you have a fixed-payment variable mortgage, ask your lender for your trigger rate and how much principal you are paying each month.
5. Mark 9 December 2026 on your calendar, and speak with a licensed mortgage professional about your options before then.

Frequently asked questions

Sources

• Bank of Canada raises the policy rate by 25 basis points to 2½% (28 Oct 2026)
• National Bank of Canada increases its prime rate (28 Oct 2026)
• RBC Royal Bank mortgage rates
• FCAC: Interest on mortgages
• OSFI: Minimum qualifying rate for uninsured mortgages
• Investment Executive / The Canadian Press: Bank of Canada delivers 1st hike in three years
• Desjardins Economic Studies: Bank of Canada, 28 October 2026
• TRREB Market Watch, September 2026

Related reading

• Variable-Rate Mortgage After the Hike: How Much Your Payment Changes
• Should I Lock In My Variable Mortgage Before 2027?
• Mortgage Renewal in 2027 After the Rate Hike: Your Options in Ontario
• Will Mortgage Rates Go Down in 2027? What to Plan For in Canada