The Bank of Canada raised its overnight-rate target by 0.25 percentage points, from 2.25% to 2.50%, on October 28. Lenders decide when and how to change prime rates; fixed mortgages already signed do not change because of today’s decision.
The increase is confirmed. The precise household effect still depends on the borrowing product, payment structure and whether a lender changes its prime rate.
Confirmed Bank of Canada overnight-rate target after the October 28 decision.
What changes first if the Bank moves
| Product | Likely first impact |
|---|---|
| Variable-rate mortgage | The payment or amortization may change, depending on the mortgage contract. |
| HELOC or line of credit | Rates tied to lender prime can react after the lender changes prime. |
| Fixed mortgage already signed | Your contracted rate does not change immediately. |
| New fixed mortgage quote | Bond-market moves matter more than the overnight rate alone. |
| Savings account or GIC | New posted rates can move, but timing and size vary by institution. |
What a 0.25-point move can mean
For illustration, a $500,000 mortgage with 25 years remaining at 4.50% works out to roughly $2,767 per month using Canadian semi-annual compounding. At 4.25%, the estimate falls about $69 a month. At 4.75%, it rises about $70. Your lender’s calculation can differ because of payment frequency, contract terms and whether your variable mortgage has a fixed payment.
Run the rate-change calculator with your own balance.
Three checks to make before reacting
- Read your mortgage type. Variable payment and adjustable payment are not interchangeable.
- Find the renewal date. A headline rate move may matter less than the rate available when your term ends.
- Compare the full offer. Penalties, prepayment privileges and fees can outweigh a tiny rate difference.
Do not assume every borrowing rate moves identically or instantly. Check your lender’s prime-rate announcement and your own contract before changing a mortgage strategy.
Official sources
- Bank of Canada: October 28 announcement schedule and release details
- Bank of Canada: Canadian interest-rate data
Keep reading
Canada’s inflation rate reached 3.1% · Canadian home prices are falling nationally
This page was reviewed and approved for publication by Matelacom Inc. Confirmed figures link to primary sources; analysis and estimates are labelled. Corrections: info@matelacom.ca.
This article is for general educational purposes only and is not personalized financial, tax, legal, employment or real-estate advice. Figures and program details can change after publication; confirm decisions with the linked official source and a qualified professional where appropriate.