The Bank of Canada raised its target for the overnight rate by 25 basis points to 2.5% on 28 October 2026. The Bank Rate moved to 2.75% and the deposit rate to 2.45%. The Bank's published policy-rate table shows the previous target at 2.25% from 29 October 2025 through the 2 September 2026 announcement, so this is the first increase in about a year.

Governing Council said it raised the policy rate to reduce the risk that continuing high energy prices spread more widely into other goods and services. The press release states that CPI inflation has been around 3% since April and is expected to rise to about 3.5% by the end of the year. Excluding gasoline, inflation was 2.2% in September, and measures of core inflation remain close to 2%. Near-term household and business inflation expectations have risen, while longer-term expectations remain well anchored, according to the Bank.

On housing and demand, the same statement says consumption growth is expected to moderate and housing to remain relatively weak. Growth through the middle of 2026 was stronger than in the July Monetary Policy Report, with second-quarter GDP up 3.3% and third-quarter indicators pointing to about 2%. The unemployment rate has been around 6.5% for several months. The Canadian dollar, the Bank said, had weakened somewhat on US-dollar strength and has since recovered to around 71 US cents, the level assumed in the July Report.

For a buyer financing Canadian property with a Canadian variable-rate loan, the overnight target is the benchmark that banks use when they set prime and floating mortgage rates, so the same principal now sits against a higher policy floor. A fixed-rate mortgage priced before the decision is not rewritten by the overnight move, though new fixed offers still track longer-term bond and swap rates as well as lender margins. A buyer paying cash from savings held in another currency is not directly tied to the overnight rate, but the purchase price still has to be converted into Canadian dollars on the day of settlement. Toronto-area condominium buying in the third quarter is covered separately in Investment groups bought nearly half of new Toronto-area condos in the third quarter.

The next scheduled announcement of the overnight rate target is 9 December 2026. The October Monetary Policy Report was published with the decision. Central bank moves that change what a property loan costs are collected on Rate decisions.

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Sources

Sources read 29 October 2026.