What just happened with the Bank of Canada rates?!?!

Bank of Canada Raises Interest Rate to 2.50%: What It Means for Buyers and Sellers

October 28, 2026 | Rooted in Real Estate

If you’re planning to buy or sell a home, today’s interest rate announcement might have you wondering whether you should change your plans.

The Bank of Canada has increased its policy interest rate by 0.25 percentage points to 2.50%. That’s a change worth paying attention to, but what it means for you depends on your mortgage, your budget and the move you’re planning. (bankofcanada.ca)

For buyers and sellers across Durham Region, Northumberland County and the surrounding communities, here’s how I would approach it.

First, 2.50% is not your mortgage rate

The Bank of Canada’s policy rate influences borrowing costs, but it isn’t the rate lenders automatically offer homebuyers.

Variable mortgage rates generally move with a lender’s prime rate, which is influenced by the Bank of Canada. If your lender increases prime, your variable mortgage rate will generally follow according to your contract. An existing fixed mortgage rate stays the same for the remainder of its term. (td.com)

What this means if you’re buying

Start by checking your numbers again.

If you’ve been pre-approved, contact your mortgage broker or lender before making an offer. Ask whether today’s announcement changes your approval amount, expected payment or available rate. If you have a rate hold, confirm exactly what it protects and when it expires.

A higher borrowing rate can mean a higher payment for the same mortgage amount. For some buyers, that may mean adjusting their price range. Others may still qualify for the same amount but decide they would rather leave more room in their monthly budget.

Your comfortable payment matters just as much as your maximum approval. Property taxes, utilities, insurance, maintenance and everyday expenses still need to fit.

Could there be more room to negotiate?

Possibly. If higher borrowing costs cause some buyers to pause, sellers may face less competition. That could create opportunities to negotiate price, closing dates or conditions.

But that’s a possible response—not a prediction for every neighbourhood. We need to look at the homes available in your price range, recent comparable sales and how quickly similar properties are selling.

I wouldn’t encourage someone to rush into a purchase out of fear of another increase. I also wouldn’t assume waiting guarantees a better deal.

What this means if you’re selling

Pricing deserves careful attention.

When borrowing costs rise, buyers may become more sensitive to monthly payments. A home that stretches their budget could fall off their list, even if they like it.

That makes it especially useful to review your competition and recent sales before setting an asking price. What you hope to receive and what today’s buyers can support may be different.

Presentation matters, too. Taking care of small repairs, reducing clutter and making your home easy to view can help buyers see its value.

Leave room for a conversation.

Depending on your local market, buyers may ask for financing or inspection conditions, a different closing date or a price adjustment. Those requests deserve consideration within the full offer.

Today’s announcement alone doesn’t tell us your home’s new value. We’ll need to watch actual buyer activity and comparable sales rather than assume an immediate price change.

What if you’re selling and buying?

Look at both transactions together.

Your sale proceeds, next mortgage payment, moving expenses and any mortgage penalties all affect the cost of your move. Before listing, speak with your lender about whether your mortgage can be transferred to another property and what borrowing more would involve.

If you already have a variable mortgage, your payment may rise when your rate changes. With some fixed-payment variable mortgages, the payment initially stays the same while more goes toward interest and less toward principal. Your lender can explain how your particular mortgage works. (canada.ca, bankofcanada.ca)

Make your next move with current information

My advice is to review your financing, understand the market around the home you’re buying or selling, and make a plan that leaves you comfortable after closing.

If you’re considering a move in Durham, Northumberland, Kawartha Lakes or the surrounding areas, let’s talk about what these numbers mean for your plans.