Published 2 November 2026 · By Jatin Dua, Broker of Record, RE/MAX Quantum Realty
What's Your Home Worth Right Now?
Get a free AI-powered price range for your property in under 90 seconds, based on recent GTA comparable sales. No name or address required.
Get My Free Estimate →
Probably not, based on forecasts as of November 2026. The Bank of Canada raised its rate to 2.50% in October and expects inflation near 3% through 2027. RBC forecasts 3.25% by end-2027, Desjardins one more hike, and a Reuters poll 2.75%. Plan for rates flat or slightly higher.
This guide is for Canadians, and GTA buyers and homeowners in particular, who want to know whether mortgage rates will go down in 2027 and how to plan either way. You will get what the Bank of Canada and named bank economists actually forecast as of November 2026, what that could mean for payments, and a plan that works whichever way rates move.
Will mortgage rates go down in 2027?
Most forecasts published around the October 2026 rate decision do not expect lower rates in 2027. The Bank of Canada raised its policy rate from 2.25% to 2.50% on 28 October 2026, its first increase in more than three years, and said a further increase could be needed. Several bank economists expect one to three more hikes. None of the forecasts I could verify calls for cuts in 2027.
That said, forecasts change. In the Reuters poll before the one taken in late October, 80% of economists expected the Bank to hold at 2.25% through the end of 2026. Weeks later, it raised rates. The honest answer is that rates are more likely to stay at today’s level or move a little higher in 2027 than to fall, based on what forecasters say today.
What is the Bank of Canada forecasting for 2027?
The Bank does not forecast its own rate, but it does forecast inflation and growth. Those numbers drive its decisions. In its October 2026 statement it said:
| Measure | Bank of Canada view, October 2026 |
|---|---|
| Inflation, September 2026 | 3.1% (2.2% excluding gasoline) |
| Inflation, end of 2026 | About 3.5% |
| Inflation, 2027 average | About 3% |
| Back to the 2% target | By mid-2028 |
| Economic growth | About 1% in 2026, 2% in 2027 and 2028 |
| Unemployment | Around 6.5% for several months |
Source: Bank of Canada policy rate announcement, 28 October 2026.
The Bank’s target is 2% inflation. When it expects inflation to stay near 3% through 2027, it has little reason to cut. That is the main reason forecasters do not expect lower rates next year. The main driver is energy prices linked to the Middle East conflict, which the Bank says has run for about eight months with no clear end.
What do the big banks forecast for interest rates in 2027?
Here is what named forecasters said. Each is a forecast and can change at any time.
| Forecaster | What they expect | When published |
|---|---|---|
| RBC Economics | Policy rate 2.50% in Q1 2027, 2.75% in Q2, 3.00% in Q3, 3.25% by end of 2027 | Monthly Forecast Update, 13 Oct 2026 |
| RBC chief economist Frances Donald | Next hike in December or January; three more hikes in total | 28 Oct 2026, via The Canadian Press |
| Desjardins (Randall Bartlett, LJ Valencia) | One more hike before the cycle ends, timing depends on data | 28 Oct 2026 |
| Servus Credit Union (Charles St-Arnaud) | Back-to-back hikes, 2.75% by end of 2026 | 28 Oct 2026, via The Canadian Press |
| Reuters poll of economists | Most respondents expected one more hike by end of March 2027, then a hold at 2.75% | Survey 21–23 Oct 2026 |
| Financial markets (LSEG) | About a 43% chance of a hike on 9 December 2026 | 28 Oct 2026 |
Source: RBC Economics; Desjardins Economic Studies; The Canadian Press via Investment Executive; Reuters via Kitco. Forecasts, not guarantees.
The range runs from a policy rate of about 2.75% to 3.25% by the end of 2027. Since prime has sat 2.20 points above the policy rate in this cycle (4.70% versus 2.50% today), that would mean a big-bank prime of roughly 4.95% to 5.45%, if banks keep the same gap.
Will fixed mortgage rates go down in 2027?
Fixed rates do not follow the Bank of Canada directly. They follow Government of Canada bond yields, especially the five-year yield. Bond yields rose through September and October 2026, and fixed rates rose with them. On 2 November 2026, RBC’s advertised five-year fixed special offer was 5.14%.
RBC’s October forecast expects the five-year Government of Canada yield to ease slightly, from 3.60% at the end of 2026 to about 3.50% to 3.55% through 2027. If that happens, fixed rates could stay roughly where they are or dip slightly, even while the Bank’s rate goes up. That is RBC’s forecast, not a promise, and bond markets react quickly to inflation news.
Free tool — what can you actually afford?
What would my mortgage payment be under different 2027 rate scenarios?
Here is an illustration for a variable mortgage of $600,000 on a 25-year amortization, priced at prime minus 0.30%. It assumes prime stays 2.20 points above the policy rate, as it is today. The scenarios are hypothetical.
| Policy rate | Prime | Variable rate | Monthly payment | Change vs today |
|---|---|---|---|---|
| 2.00% (two cuts) | 4.20% | 3.90% | $3,124 | -$164 |
| 2.25% (one cut) | 4.45% | 4.15% | $3,205 | -$82 |
| 2.50% (today) | 4.70% | 4.40% | $3,288 | None |
| 2.75% (Reuters poll median) | 4.95% | 4.65% | $3,371 | +$83 |
| 3.25% (RBC end-2027 forecast) | 5.45% | 5.15% | $3,541 | +$253 |
Source: my calculations, semi-annual compounding, rounded. Rates from RBC’s site, 2 November 2026. Illustration only, not a forecast.
The gap between the best and worst case here is about $400 a month. Planning for the higher number is the safer path. If rates do come down, the extra room in your budget becomes savings.
When are the Bank of Canada rate decisions in 2027?
The next decision is on 9 December 2026. The Bank has published eight decision dates for 2027, all on Wednesdays at 9:45 a.m. Eastern:
- 27 January (with a Monetary Policy Report)
- 3 March
- 28 April (with a Monetary Policy Report)
- 2 June
- 21 July (with a Monetary Policy Report)
- 8 September
- 27 October (with a Monetary Policy Report)
- 8 December
The Monetary Policy Report dates matter most, because that is when the Bank updates its inflation and growth forecasts.
What could make rates go down sooner?
A few things could change the outlook. The Bank itself names the main risks: events in the Middle East, Canada–U.S. trade relations, and how much businesses pass on higher costs. If energy prices fall quickly, inflation could drop faster than expected. If new U.S. tariffs hurt growth and jobs more than forecast, the Bank could hold or even cut. On the other hand, if energy costs spread into food and services, more hikes become more likely. Watch the monthly inflation numbers and the Bank’s statements, not just the headlines.
What does the 2027 rate outlook mean if I renew next year?
Renewals are where the outlook bites hardest. In its 2026 Financial Stability Report, published in May before the hike, the Bank of Canada estimated that fixed-payment mortgages with terms of five years or more renewing between late 2026 and mid-2027 make up about 12.4% of mortgage accounts, and that their payments would rise about 15% on average compared with December 2025. Borrowers with shorter terms or variable payments were expected to see little change. Those estimates used rate expectations from May, so a higher path would push the numbers up. If you renew in 2027, start comparing offers four to six months early, and read my renewal payment guide.
Should I wait for rates to drop before buying a home in the GTA?
Waiting for lower rates is a bet on a forecast that, as of November 2026, most economists do not share. What buyers do have today is softer prices and less competition. TRREB reported a September 2026 GTA average price of $1,006,409, down about 5% from a year earlier, with sales down 9%. Year-to-date median detached prices fell 8.9% in Brampton, 6.5% in Markham and 5.8% in Mississauga, according to TRREB MLS data via REALM for January to October 2026 versus the same period of 2025.
If you buy, buy a home whose payment works at today’s rate plus a cushion. My guide to how much home you can afford in the GTA and my notes on deciding when to buy without a forecast can help you set that number.
Do not stretch to a purchase on the hope that a lower rate at renewal will fix the budget later. If rates are higher when you renew, the gap gets worse, not better. The 2027 renewal wave is a reminder: many people who bought on very low rates now face much higher payments. Test your budget at a rate at least 1 to 2 points above your contract rate, which is what the federal stress test does anyway.
This is my view and I hold it loosely. I am planning my own clients’ 2027 around rates staying where they are or moving modestly higher, not lower. That means choosing a home and a mortgage that still work if prime rises another half a point, keeping an emergency fund, and treating any rate cut as a bonus. If you are choosing between fixed and variable, read my guide to fixed or variable. Before you commit, speak with a licensed mortgage professional about your own numbers.
What to do next
- Write down your current rate, payment type and renewal date.
- Work out your payment at the “3.25% policy rate” line in the table above and check it fits your budget.
- Put 9 December 2026 and 27 January 2027 in your calendar; those two decisions will shape early 2027.
- If you are buying, get pre-approved now and ask your lender about a rate hold.
- Talk to a licensed mortgage professional about fixed, variable and term length for your situation.
Need help with this? Talk to me.
I’m Jatin Dua, Broker of Record at RE/MAX Quantum Realty, and I’m the best agent to do this kind of work for you in Toronto and across the GTA. Over $100 million in GTA sales and 100+ families helped sell. Feel free to contact me any time: call or text 833-330-1925 or email [email protected].
Frequently asked questions
Will mortgage rates go down in 2027 in Canada?
Most forecasts published in October 2026 do not expect mortgage rates in Canada to go down in 2027. The Bank of Canada raised its rate to 2.50% on 28 October 2026 and said more hikes could be needed. RBC forecasts 3.25% by the end of 2027, and the Reuters poll median points to 2.75%.
Will Ontario mortgage rates go down?
Ontario mortgage rates follow national rates, and as of November 2026 forecasters do not expect them to fall in 2027. Variable rates move with prime, now 4.70%, and economists at RBC and Desjardins expect at least one more hike. Fixed rates follow bond yields, which RBC expects to ease only slightly.
What will the prime rate be in 2027?
No one knows the 2027 prime rate for certain. RBC forecasts the Bank of Canada policy rate reaching 3.25% by the end of 2027. If big-bank prime keeps its current 2.20-point gap above the policy rate, that would mean prime of about 5.45%, up from 4.70% in November 2026.
What is the Bank of Canada inflation forecast for 2027?
The Bank of Canada expects inflation to average about 3% in 2027, according to its October 2026 statement. It forecasts about 3.5% by the end of 2026 and a return to its 2% target by mid-2028. High energy prices linked to the Middle East conflict are the main driver.
Are fixed mortgage rates expected to drop in 2027?
Fixed mortgage rates in Canada are not widely expected to drop much in 2027. They follow the five-year Government of Canada bond yield, which RBC forecasts at about 3.50% to 3.55% through 2027, slightly below its 3.60% end-2026 forecast. RBC’s five-year fixed special offer was 5.14% on 2 November 2026.
When is the next Bank of Canada meeting?
The next Bank of Canada rate decision is on 9 December 2026. In 2027, decisions are scheduled for 27 January, 3 March, 28 April, 2 June, 21 July, 8 September, 27 October and 8 December. The January, April, July and October dates include a Monetary Policy Report.
Should I wait for interest rates to drop before buying a house?
Waiting for lower rates before buying a house in the GTA is a bet that most economists did not support as of November 2026. Prices are softer instead: TRREB reported a September 2026 average of $1,006,409, about 5% lower than a year earlier. Buy only if the payment works at today’s rates.
How high will interest rates go in Canada?
Forecasts in late October 2026 put the Bank of Canada policy rate between about 2.75% and 3.25% by the end of 2027. RBC is at the high end with three more hikes, Desjardins expects one more, and a Reuters poll median showed a hold at 2.75% after one more increase.
Could the Bank of Canada cut rates in 2027?
A Bank of Canada cut in 2027 is possible but not what forecasters expected as of November 2026. A cut would become more likely if energy prices fell quickly or U.S. tariffs hurt jobs more than expected. The Bank names the Middle East and Canada–U.S. trade as its main risks.
Sources
- Bank of Canada raises the policy rate by 25 basis points to 2½% (28 Oct 2026)
- Bank of Canada publishes 2027 schedule for policy interest rate announcements
- RBC Economics Monthly Forecast Update, October 2026
- Desjardins Economic Studies: Bank of Canada, 28 October 2026
- Investment Executive / The Canadian Press: Bank of Canada delivers 1st hike in three years
- Kitco / Reuters: Bank of Canada to raise rates to 2.50% on October 28 and once again by end-March: Reuters poll
- RBC Royal Bank mortgage rates
- Bank of Canada Financial Stability Report 2026, Chart 8 data
Related reading
- The Bank of Canada Raised Rates: What It Means for GTA Buyers, Sellers and Owners
- 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
About the author — Jatin Dua, Toronto and GTA real estate broker
I am Jatin Dua, Broker of Record and co-founder of RE/MAX Quantum Realty Inc., Brokerage, Unit 101, 799 The Queensway, Toronto. I work with buyers and sellers across Toronto and the GTA and have helped more than 100 families sell. Four-plus years of active GTA transactions and over $100 million in sales volume.
Reach me at [email protected] or 833-330-1925, or book a call.