A mortgage rate announcement makes headlines. What matters at your kitchen table is how it affects your payment, your plans and the money left over each month.
On October 28, 2026, the Bank of Canada increased its policy rate by 0.25 percentage points to 2.50%. RBC, TD and BMO subsequently increased their prime lending rates to 4.70%, effective October 29.
For buyers and homeowners in Hamilton, Burlington and surrounding areas, this is a reason to review the numbers carefully—not to make a rushed decision.
What does a quarter-point increase mean for your payment?
As an illustration, consider a $500,000 mortgage with 25 years remaining.
Using monthly payments and semi-annual compounding, an increase from 4.00% to 4.25% changes the payment from approximately $2,630 to $2,698. That is about $68 more each month, or roughly $820 over a year.
This is an example, not a lender quote. Your actual change depends on your mortgage balance, remaining amortization, interest rate and contract terms.
There is also an important distinction between different variable-rate mortgages.
With an adjustable payment, a rate increase generally raises the required payment. With a variable-rate mortgage that has fixed payments, the payment may initially stay the same while more goes toward interest and less toward reducing the mortgage balance. Contract provisions, including trigger rates, can eventually require action.
An unchanged payment does not necessarily mean an unchanged borrowing cost.
Fixed rates don’t move in lockstep with the Bank of Canada
Fixed mortgage rates are influenced substantially by bond yields and lenders’ funding costs. They can change before a Bank of Canada announcement and do not necessarily rise or fall by the same amount as the policy rate.
If you already have a fixed-rate mortgage, this announcement alone does not change your contracted rate during its existing term.
If you are buying or approaching renewal, compare actual offers. The policy rate, a bank’s prime rate and the mortgage rate available to you are different numbers.
Fixed or variable? Start with your circumstances
I would be cautious about choosing a mortgage solely because someone confidently predicts the next rate announcement.
Instead, work through questions such as:
- How much room does your monthly budget have?
- What would another increase do to your cash flow?
- How important is payment certainty to you?
- Could you need to sell, refinance or move before the term ends?
- What are the prepayment privileges, restrictions and potential penalties?
A variable option may suit someone who can absorb payment changes and understands the terms. A fixed option may suit someone who places greater value on certainty.
Neither wins automatically. Compare the actual pricing and conditions with your mortgage professional rather than assuming variable is always cheaper or fixed is always the safer overall choice.
Approaching renewal? Give yourself time
Do not treat your lender’s first renewal offer as the only option.
The Financial Consumer Agency of Canada recommends reviewing your mortgage needs and shopping around before renewal. That includes considering your budget, payment schedule and prepayment options.
Start the conversation early enough to obtain competing offers and understand any costs or requirements involved in changing lenders.
If you are considering restructuring other debts, review the total interest cost and repayment period—not just whether the new monthly payment looks smaller.
Buying a home? Your comfortable budget matters
The amount you qualify to borrow and the amount you feel comfortable carrying are two different things.
Before choosing a purchase price, build a household budget that includes property taxes, utilities, insurance, maintenance and condo fees where applicable. Leave room for savings and unexpected expenses.
Negotiating opportunities also depend on the particular property and its competition. A rate increase does not automatically make every seller negotiable or every listing a bargain.
My role is to help you assess the property, compare relevant sales and negotiate with a clear understanding of your objectives. Your mortgage professional can confirm financing options and payment scenarios.
Make a plan before making a move
You do not need to predict every interest rate decision to make a thoughtful real estate decision. You need reliable numbers, a suitable mortgage structure and enough breathing room to live comfortably after closing.
I’m Stephen Paige, Broker of Record, helping buyers and sellers since 2007. If you are planning a purchase or sale in Hamilton, Burlington or surrounding areas, we can work through the real estate side of your move while you confirm financing with your lender or mortgage broker.
Learn about buying with Stephen Paige and how my buyer rebate works.
Information checked November 3, 2026. Rates and mortgage offers can change. Payment figures are illustrative; confirm your specific terms with your lender.