On October 28, 2026, the Bank of Canada (BoC) raised its policy rate by 25 basis points from 2.25% to 2.50%. This marks its first rate increase since July 2023.
If you’re considering buying or selling a home, the announcement raises practical questions about borrowing costs, buyer confidence and timing. Here’s what to consider in Oakville and the Greater Toronto Area.
Why Did the Bank Raise Rates?
Persistently high energy prices have increased production and transportation costs for businesses. BoC is concerned that more of these costs will be passed on to consumers, keeping inflation elevated for longer.
At the same time, Canada’s economy has performed better than the Bank previously expected. Together, these developments prompted the decision to raise rates to reduce the risk of energy-related price increases spreading more broadly.
Importantly, the Bank’s concern is about inflation becoming more persistent. It does not mean that every part of the economy - or the housing market is experiencing strong demand.
What Does This Mean for Your Mortgage?
Variable-rate mortgages: If your lender increases its prime rate, your mortgage rate will typically rise as well. Whether your monthly payment changes depends on your mortgage structure. Some payments adjust with interest rates; others may remain unchanged while more of the payment goes toward interest and less toward principal.
Existing fixed-rate mortgages: Your interest rate generally remains unchanged until the end of your current term. You will face the rates available at the time you renew.
New fixed-rate offers: These are influenced largely by bond yields and lenders’ funding costs. They do not necessarily rise at the same time, or by the same amount, as the Bank of Canada’s policy rate.
What Should Buyers Consider?
Higher mortgage rates can reduce purchasing power. Depending on the rate offered and your financial circumstances, they may affect your qualifying mortgage amount, your monthly payments or both.
Before submitting an offer, ask your mortgage advisor to reconfirm your borrowing limit, pre-approval terms and expected payments. If you already have a rate hold, confirm its expiry date and conditions.
The goal is to make an offer based on current financing information and a payment you’re comfortable carrying.
What Should Sellers Consider?
Buyer confidence matters alongside purchasing power.
The first rate increase in over three years may cause some buyers to worry about further increases. They could take longer to decide or negotiate more carefully on price and conditions.
That makes realistic pricing and thoughtful preparation especially important.
Review recent comparable sales alongside the properties currently competing for the same buyers in your neighbourhood. If your home is already listed, use showing activity, buyer feedback and new sales to assess your strategy. Allow flexibility in your timeline in case the selling process takes longer than expected.
Does a Rate Increase Mean Home Prices Will Fall?
One rate increase does not automatically mean home prices will decline, or that sellers need to reduce their asking price immediately.
For Oakville and the GTA, the impact will depend on local inventory, buyer demand and what comparable properties are actually selling for.
A well-prepared home with limited competition may face different conditions from a property competing with several similar listings. Local evidence should guide your decision.
When Is the Next Bank of Canada Rate Announcement?
The next scheduled interest rate announcement is December 9, 2026.
The Bank has indicated that further increases may be needed, but it will proceed carefully and make decisions one meeting at a time. Another increase is a possibility, rather than a confirmed outcome.
For buyers and sellers, this means building a plan that works with current rates while allowing room for uncertainty.
Your Next Steps
If you’re buying: Reconfirm your budget, mortgage pre-approval and any rate-hold conditions before making an offer.
If you’re selling: Review nearby competition and recent sales, then align your price expectations with your selling timeline.
If you’re buying and selling: Plan both transactions together, including deposits, available equity, financing and closing dates.
If your mortgage renewal is approaching: Compare options early so you have time to understand the payments and terms.
Will this rate increase change your buying or selling plans?
If you’d like to understand how it could affect the sale of your home, contact The Fisher Group. We’ll help you review your local market and map out your next move.
Call or text 647.598.8488.
The Fisher Group | Royal LePage Oak Park
