The Bank of Canada Is Holding Rates. Could That Change on October 28?
What BC and Vancouver homebuyers should know as we head into the final months of 2026
If you’ve been following mortgage news lately, you might be getting mixed messages.
The Bank of Canada held its policy rate at 2.25% on September 2, where it has remained since late 2025. At first glance, that sounds like a relatively stable environment for borrowers.
But with inflation risks increasing, the conversation is beginning to shift from how long rates will stay unchanged to whether the Bank may eventually need to move them higher.
At the same time, bond yields have moved higher, trade tensions remain a concern, and here in British Columbia, the housing market continues to operate at a slower pace than we’ve historically been used to.
So if you’re buying, renewing or refinancing in Vancouver right now, simply watching the Bank of Canada rate isn’t enough.
Here’s what I’m paying attention to.
The Bank of Canada is holding, but inflation is complicating the picture
On September 2, the Bank of Canada kept its overnight rate at 2.25%.
The decision came as the Bank balanced two competing forces: uncertainty around economic growth and increasing upside risks to inflation.
The Bank reported that CPI inflation had been hovering around 3%, driven largely by higher gasoline prices, while inflation excluding gasoline was 2.2% in July and measures of core inflation remained close to 2%. At the same time, higher energy prices and renewed Canada-US trade tensions created additional uncertainty around where inflation could go next.
For mortgage borrowers, this distinction matters.
A Bank of Canada hold means there has been no new policy-rate-driven change to variable mortgage rates from the September decision itself.
But that doesn’t guarantee the Bank will continue holding rates.
And fixed mortgage rates work differently.
Fixed mortgage rates don't simply follow the Bank of Canada
This is one of the biggest misconceptions I hear from borrowers.
Variable mortgage rates are closely connected to lenders' prime rates and therefore to Bank of Canada policy.
Fixed mortgage rates, however, are influenced heavily by government bond yields, particularly the five-year Government of Canada bond yield for common five-year mortgage terms.
And this is where the story has become more interesting.
On October 1, BCREA reported that Canadian five-year bond yields had risen to around 3.7%, and said that if those levels persist, five-year fixed mortgage rates could move above 5%.
While the baseline outlook has been for the Bank of Canada to keep its policy rate at 2.25% through the end of 2026, that outcome is no longer something borrowers should simply assume. With upside risks to inflation increasing, the possibility of a rate increase has become part of the conversation heading into the October 28 announcement.
In other words:
The Bank of Canada can hold its rate while fixed mortgage rates move higher.
That’s why waiting for the next Bank of Canada announcement doesn’t necessarily tell you what will happen to the fixed rate you’re being offered.
Meanwhile, Vancouver buyers are seeing a very different housing market
The other side of the equation is home prices and inventory.
Metro Vancouver recorded 1,869 residential sales in August 2026, down 4.6% from August 2025 and 20.7% below the 10-year seasonal average.
Across BC, the story is similar.
There were 5,653 residential sales in August, 4.7% fewer than a year earlier. The average residential MLS® price across the province was approximately $924,826, about 1% lower year-over-year. Sales were also 25.4% below the 10-year August average.
BCREA has described the recovery in sales as gradual, while noting that active listings have been near their highest level since 2015. Its August forecast projected BC's average price to decline 1.2% in 2026, with weakness in the more expensive Lower Mainland markets contributing to that provincial trend.
For some Vancouver buyers, that creates an interesting situation.
You may have more inventory to consider and potentially more time to make a decision than during highly competitive markets.
But financing costs remain a major part of the affordability equation.
And that's exactly why I don't think buyers should look at home prices and mortgage rates separately.
A lower purchase price doesn't automatically mean a cheaper home
When I'm working with a buyer, I care about more than the listing price.
I want to know:
What will the mortgage actually cost each month?
How much cash will you need to close?
What happens to the numbers at renewal?
Could you comfortably handle the payment if rates move?
Would a fixed or variable mortgage better fit your circumstances?
And what does the overall cost look like over the period you actually expect to own the property?
A home selling for less than it might have a year ago can still carry a higher financing cost depending on the mortgage rate and structure.
On the other hand, a buyer who only waits for a lower mortgage rate could eventually find themselves shopping in a market with different prices, inventory or competition.
There are several moving pieces.
Renewing your mortgage? Don't automatically sign the renewal letter
This environment also matters for existing homeowners.
If your mortgage is coming up for renewal, your current lender's offer isn't necessarily your only option.
One particularly important rule for some borrowers is that OSFI does not expect federally regulated lenders to apply the minimum qualifying rate to an uninsured straight switch at renewal when the borrower moves to another federally regulated lender without increasing either the loan amount or amortization period.
That doesn't mean switching is automatically the right move. Rates, penalties, features, fees, prepayment privileges and your financial situation all need to be considered.
But it does mean renewal should be treated as an opportunity to review your mortgage rather than simply an administrative task.
What would I do as a buyer right now?
I wouldn't try to perfectly time the Bank of Canada.
And I wouldn't make a decision based on a headline saying rates are going up or down.
Instead, I'd run the numbers.
If you're considering a $500,000, $800,000 or $1 million property, we can calculate what that purchase actually looks like with today's available mortgage options.
Then we can stress-test different scenarios.
What happens if rates rise?
What happens if they fall?
How much flexibility do you have in your monthly budget?
Would putting more money down materially change the equation?
Is a shorter fixed term worth considering?
Does variable make sense for your risk tolerance?
Those answers are much more useful than trying to predict exactly what the Bank of Canada will do next.
The next date I'm watching: October 28
The Bank of Canada's next scheduled interest rate announcement is October 28, 2026, and it will also release its next Monetary Policy Report that day.
And this meeting could be particularly important.
After holding the policy rate at 2.25% in September, the Bank acknowledged that upside risks to inflation had increased and indicated that it remained prepared to adjust monetary policy as needed.
That means a rate increase on October 28 cannot be ruled out.
The Bank will be looking closely at inflation, economic growth, energy prices, trade developments and other incoming data before making its decision.
For mortgage borrowers, there are really two things to watch.
If the Bank raises its policy rate, variable-rate mortgages and other borrowing products tied to prime could be affected.
At the same time, fixed mortgage rates can continue moving independently as bond yields change, meaning mortgage pricing could shift even before October 28.
That's the key takeaway:
The Bank of Canada is holding today, but that doesn't guarantee it will still be holding after October 28. And mortgage rates don't have to wait for the Bank's decision to move.
If you're buying in Vancouver or elsewhere in BC, renewing your mortgage or considering a refinance, this is a good time to understand your numbers before making your next move.
Let's run the numbers
Every mortgage situation is different.
If you want to understand what today's market means for your purchase, renewal or refinance, book a call with me and let's look at the options together.
No guessing. No trying to time the market perfectly.
Just the numbers, your goals and a mortgage strategy that makes sense for you.
Ready to talk about your mortgage options?
Whether you’re planning to buy, coming up for renewal, considering a refinance, or simply wondering what today’s market means for you, you don’t have to figure it out alone.
I can help you look at the numbers, compare your options, and build a mortgage strategy around your goals and financial situation.
Ready to see what your options look like?
Information is general in nature and is not financial advice. Mortgage rates, qualification requirements and product availability vary by borrower and lender.
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