The Bank of Canada Just Raised Rates. Here’s What It Means If You’re Buying, Selling or Own a Home in Halifax
This morning, the Bank of Canada raised its key interest rate for the first time since July 2023.
By tonight, you’ll see headlines saying the housing market is about to change, that buyers are priced out, that now is the time to panic or the time to pounce.
Most of that won’t apply to you.
A 0.25% increase is real, and for some people it matters. But who it affects, and by how much, depends almost entirely on what kind of mortgage you have, or are about to get. So let’s skip the headlines and work through the actual numbers.
What did the Bank of Canada do on October 28, 2026?
The Bank of Canada raised its policy interest rate by 0.25 percentage points, to 2.50%. It’s the first increase since July 2023, and markets widely expected it.
The policy rate is the rate banks use to lend to each other overnight. It doesn’t set your mortgage rate directly, but it drives the prime rate, which sets the rate on variable-rate mortgages and lines of credit.
Canadian banks typically move their prime rate in step with the Bank of Canada. That would take prime from 4.45% to 4.70%.
Why did the Bank of Canada raise rates?
The Bank raised rates because inflation has climbed back above its target, driven mostly by energy prices. Annual inflation was 3.2% in September, above the Bank’s 1% to 3% target range.
Governor Tiff Macklem said the increase was needed “to reduce the risk that elevated energy prices could spill over” into broader prices. In plain terms: the Bank is worried that higher fuel and transportation costs will push up the price of everything else.
The Bank now expects inflation to end 2026 around 3.5%, stay near 3% for most of 2027, and return close to 2% by mid-2028.
Not everyone agreed with the move. Some economists argued that core inflation, which strips out volatile items like energy, is still around 2%, and that a hike could slow a fragile economy facing U.S. trade tensions and a weak job market.
Will there be more increases?
Possibly. The Bank said there “could be a need to increase the policy rate further, but given uncertainties, we will proceed carefully.” That’s not a promise of more hikes, but it’s not a signal that this is the last one either.
Even after today, the Bank describes its rate as below “neutral,” meaning it isn’t yet trying to actively slow the economy.
Does a rate hike affect fixed-rate mortgages?
No, not if you already have one. If you have a fixed-rate mortgage, your rate and payment stay the same until your term ends. Today’s decision changes nothing for you until renewal.
Fixed rates for new mortgages are a different story. They follow five-year Government of Canada bond yields, not the Bank’s policy rate directly. Bond yields often move ahead of the Bank, based on where markets expect rates to go. So new fixed rates may rise, stay flat, or have already moved, depending on the lender.
In early October, the best insured five-year fixed rates in Canada ranged from about 4.34% to 4.79%. Check current rates with your lender or broker. They can change week to week.
What does this mean if I have a variable-rate mortgage?
If you have a variable-rate mortgage, your rate goes up by 0.25% once your lender raises its prime rate. What happens next depends on which type of variable mortgage you have.
Adjustable-rate (your payment changes): Your monthly payment goes up. On a $400,000 balance at 3.75% with 25 years left, the payment rises from about $2,050 to about $2,104, roughly $54 more a month.
Fixed-payment variable (your payment stays the same): Your payment doesn’t change, but more of it goes to interest and less to principal. You’ll pay down your mortgage more slowly. If rates keep rising, some lenders will eventually require a higher payment.
Not sure which one you have? Your mortgage statement or your lender can tell you in five minutes. It’s worth knowing this week.
Home equity lines of credit
HELOCs are usually tied to prime too. On a $100,000 balance, a 0.25% increase adds about $250 a year in interest, roughly $21 a month.
What does a rate hike mean for buyers?
For buyers, a 0.25% hike means a slightly higher monthly payment and, for many, slightly less borrowing power. It isn’t a reason to stop looking, but it is a reason to recheck your numbers.
Example 1: The monthly payment
Take a home at $586,000, the median price of single-family homes sold in Halifax-Dartmouth so far this year, according to NSAR MLS® data.
With 5% down, the insured mortgage is about $574,500, over 25 years.
| Mortgage type | Rate before | Payment before | Rate after | Payment after | Difference |
|---|---|---|---|---|---|
| Variable | 3.25% | $2,793 | 3.50% | $2,868 | +$75/month |
| Five-year fixed (if bond yields rise) | 4.50% | $3,180 | 4.75% | $3,260 | +$80/month |
About $75 to $80 a month. Noticeable, but not life-changing for most buyers who were already qualified.
Example 2: Borrowing power
This is the part of a rate hike most buyers don’t see coming.
To qualify for a mortgage in Canada, you have to pass the federal stress test. Lenders check whether you could afford your payments at the higher of 5.25% or your actual rate plus 2%. When rates go up, the qualifying rate can go up too.
Take a household earning $130,000 a year, buying with a variable-rate mortgage:
- Before the hike: a 3.25% rate means qualifying at 5.25%. Maximum mortgage: about $593,000.
- After the hike: a 3.50% rate means qualifying at 5.50%. Maximum mortgage: about $579,000.
That’s about $14,000 less they can borrow, from a 0.25% move.
This example assumes a 39% gross debt service ratio, about $540 a month in property tax and $150 in heating, and no other debts. Your lender’s numbers will differ.
What buyers should do this week
- Get your pre-approval updated. An approval from last month may not reflect today’s rates.
- Ask about a rate hold. Many lenders will hold a rate for a set period, often several months, while you shop. If rates rise further, you’re protected. If they fall, you can usually still take the lower rate.
- Look at the full market, not just the rate. Nova Scotia had 6.1 months of inventory in September, well above normal. Buyers have more choice and negotiating room than they’ve had in years. A slightly higher rate in a market with more leverage isn’t necessarily a worse deal.
What does a rate hike mean for sellers?
For sellers, a rate hike can shrink the budget of some buyers. That matters most if your home is priced at the top of a buyer’s range.
Example: The buyer who can no longer reach your price
Go back to the household that can now borrow about $579,000 instead of $593,000. If they were looking at homes listed at $600,000 to $615,000 with a modest down payment, some of those homes just moved out of reach.
If your home is listed at $610,000 and a few qualified buyers’ ceilings dropped by $14,000, you have fewer buyers who can comfortably write an offer. It doesn’t take many of them for days on market to stretch.
What sellers should do
- Price to today’s buyer, not last spring’s. Look at your price against what buyers can actually borrow now. Sometimes a small adjustment puts a home back inside a much larger group of buyers.
- Remember the competition. Nova Scotia’s active listings in September were the highest for that month in more than five years. Higher rates plus more inventory means presentation and pricing matter more than ever.
- Check your own mortgage before you sell. If you have a fixed-rate mortgage, ask your lender about any prepayment penalty for breaking it, or whether you can port it to your next home. Breaking a fixed mortgage early can cost thousands.
Should I wait for rates to come back down?
Waiting for rates to fall is a guess, not a plan. The Bank has signalled it may raise rates again, and nobody can reliably time the next move.
What you can control is whether the purchase works for you today. If the payment is comfortable at today’s rates, and you plan to stay for years, a rate move of 0.25% shouldn’t make the decision for you. If you can only make it work at the lowest possible rate, that’s a sign to slow down, whatever the Bank does next.
Who This Rate Hike Actually Affects
The table below sums up who is affected and what to do. Most homeowners with fixed-rate mortgages can ignore today’s headlines until renewal.
| You are... | What changes | What to do |
|---|---|---|
| A homeowner with a fixed-rate mortgage | Nothing until your term ends | Note your renewal date and start shopping rates 4 to 6 months before it |
| A homeowner with an adjustable variable mortgage | Payment rises about $13 a month per $100,000 owed | Confirm your new payment with your lender |
| A homeowner with a fixed-payment variable mortgage | Same payment, slower principal paydown | Ask your lender how close you are to a required payment increase |
| Someone with a HELOC | About $21 a month more per $100,000 owed | Review whether to pay down the balance |
| A buyer with a pre-approval | Borrowing power may drop | Update your pre-approval and ask about a rate hold |
| A seller | Some buyers’ budgets just shrank | Price to today’s buyer pool |
The bottom line
The Bank of Canada raised its rate by 0.25% to 2.50% today, because energy-driven inflation has climbed to 3.2%. It may raise rates again.
If you have a fixed-rate mortgage, nothing changes until renewal. If you have a variable-rate mortgage, expect about $13 more a month for every $100,000 you owe. If you’re buying, update your pre-approval and lock in a rate hold. If you’re selling, price for the buyers who can afford your home today.
A quarter point is a nudge, not a crash. Make your decisions on your numbers, not on the headlines.
Frequently Asked Questions
Q: Did the Bank of Canada raise interest rates in October 2026?
A: Yes. On October 28, 2026, the Bank of Canada raised its policy rate by 0.25 percentage points to 2.50%. It was the first increase since July 2023, driven by inflation of 3.2% in September, largely from energy prices.
Q: Does a Bank of Canada rate hike affect my fixed-rate mortgage?
A: No. If you already have a fixed-rate mortgage, your rate and payment stay the same until your term ends. New fixed rates follow bond yields, so they can change independently of the Bank’s decision.
Q: How much will my variable mortgage payment go up?
A: For an adjustable-rate variable mortgage, a 0.25% increase adds roughly $13 a month for every $100,000 owed, over a 25-year amortization. On a $400,000 balance, that’s about $54 more a month. Fixed-payment variable mortgages keep the same payment, but more of it goes to interest.
Q: How does a rate hike affect how much I can borrow?
A: It can lower it, because Canada’s mortgage stress test qualifies you at the higher of 5.25% or your rate plus 2%. In one example, a household earning $130,000 using a variable-rate mortgage could borrow about $14,000 less after the October 2026 increase.
Q: Should I wait to buy until interest rates go down?
A: Timing rates is a guess. The Bank of Canada has said further increases are possible. If the payment works comfortably at today’s rates and you plan to stay for years, a 0.25% change shouldn’t decide for you. Ask your lender about a rate hold while you shop.
Other Resources
External Authority Resources
- Bank of Canada, Policy Interest Rate: https://www.bankofcanada.ca/core-functions/monetary-policy/key-interest-rate/
- Bank of Canada, October 28, 2026 rate announcement: https://www.bankofcanada.ca/2026/10/fad-press-release-2026-10-28/
- CREA, Nova Scotia Association of REALTORS® market statistics: https://creastats.crea.ca/board/nsar/
Peter’s Resources
- Should You Sell Your Halifax Home This Winter or Wait for Spring?: https://www.livinginnovascotia.com/blog/sell-house-winter-or-spring-halifax/
- Should I Rent or Buy in Halifax? The Honest 2026 Math: https://www.livinginnovascotia.com/blog/rent-or-buy-halifax/
- Why Isn’t My House Selling in Halifax?: https://www.livinginnovascotia.com/blog/why-isnt-my-house-selling-halifax/
- Living in Nova Scotia home page: https://www.livinginnovascotia.com/
If you’re buying or selling in Halifax and want to know what today’s rate change means for your numbers specifically, I’m happy to walk through it with you: your price range, your pre-approval, and your timing. Reach out through my contact page or call me at 902-707-3400.
Peter Garonis, REALTOR®, eXp Realty of Canada, Halifax, Nova Scotia
Rate decision details are from the Bank of Canada’s announcement on October 28, 2026. Payment and borrowing examples use an insured mortgage, a 25-year amortization, and the federal stress test, and are illustrations only. Home price figures are NSAR MLS® data for single-family homes in Halifax-Dartmouth, January to September 2026. This article is not financial or mortgage advice. Speak with a mortgage professional about your own situation.