The Bank of Canada’s policy rate is 2.25%, where it has sat through a long run of holds, and the next announcement is Wednesday, October 28, 2026. Most forecasters expect another hold, but the conversation has shifted from when the next cut will come to when the first increase might arrive. Here is what that means if you are buying, renewing or selling a bungalow.
Key takeaways
- The policy rate was held at 2.25% on September 2, 2026.
- The next decision is October 28, 2026.
- Headline inflation reached 3% in July, the top of the Bank’s target range.
- Most economists expect no change in 2026, with a possible first hike in 2027.
- Fixed mortgage rates follow bond yields, so they can move before the Bank does.
Where rates stand right now
At its September 2 decision the Bank left the policy rate at 2.25%. The economy had grown faster than expected in the second quarter, but the Bank said it wanted to wait and see how trade and tariff issues develop before moving either way.
| Indicator | Latest reading |
|---|---|
| Bank of Canada policy rate | 2.25% |
| Headline inflation (July 2026) | 3.0% |
| Unemployment (August 2026) | 6.4% |
| Typical 5-year fixed, early September | Mid-4% range |
| Typical 5-year variable, early September | Mid-3% range |
Mortgage rates differ by lender, down payment and whether the mortgage is insured, so treat the last two rows as a rough guide only.
Three possible outcomes on October 28
A hold
This is the widely expected result. Variable-rate payments stay the same. The wording of the statement will matter more than the decision, because it shapes bond yields and therefore fixed rates.
A cut
Seen as unlikely with inflation at the top of the target range. If it happened, variable rates would drop by the same amount within days, and buyer confidence would likely improve.
A hike, or a strong hint of one
Financial markets have been pricing in increases over the next 12 months, and at least one forecaster sees a first hike as early as December. A hawkish tone could push fixed rates up even if the policy rate does not move.
What it means if you are buying a bungalow
- Get a rate hold. Most lenders will hold a rate for 90 to 120 days with a pre-approval. It costs nothing and protects you if rates rise while you shop.
- Budget at a higher rate. You already have to qualify at the stress-test rate. Run your own numbers at a rate one point higher to see if the payment still feels comfortable.
- Compare fixed and variable honestly. Variable is cheaper today, but it carries the risk of increases. Our fixed vs variable guide explains the trade-offs.
Bungalow tip: If you plan to add a basement suite, ask your mortgage professional early how projected rental income is treated. It can change how much you qualify for.
What it means if you already own
If your mortgage renews in the next six months, you can usually lock in a renewal rate up to 120 days ahead. Owners with a variable rate should know their trigger point and decide in advance what they would do if rates rose by half a point.
What it means for sellers
Rate uncertainty is one reason buyers were cautious in September, when GTA sales fell 9% year over year. A clear signal from the Bank, in either direction, tends to bring fence-sitters back. Sellers who are priced correctly before that happens are best placed to benefit.
Frequently asked questions
When is the next Bank of Canada announcement after October?
The Bank makes eight scheduled announcements a year. After October 28, the final decision of 2026 comes in December.
Do fixed mortgage rates change on announcement day?
Not directly. Fixed rates follow Government of Canada bond yields, which react to inflation data and to the Bank’s tone as much as the decision itself.
Should I wait for the decision before making an offer?
A rate hold removes most of the risk of waiting. The right home at a payment you can carry matters more than one announcement.
Plan your purchase with real numbers
Speak with a mortgage professional about a pre-approval, then browse bungalows for sale across Ontario within your budget. Our guide on talking to a mortgage agent about your pre-approval will help you prepare.
This article is general information as of early October 2026, not legal, tax, mortgage or insurance advice. Rules and numbers change, so confirm the details for your situation with a licensed professional.
