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A rate hike is back on the table in Canada

Next Wednesday, October 28th, the Bank of Canada announces its next rate decision. For the first time in a long while, an increase is a real possibility.

Inflation rose to 3.1% in September, above the top of the Bank’s target range for the first time in four months. Most of that came from gasoline, which was up 27.8% from a year ago. The Bank’s preferred core measures actually eased, to 1.8% and 1.9%, both under its 2% target. Governor Tiff Macklem has already said the Bank’s new forecasts next week will show higher inflation.

That has left forecasters split. Economists at TD and Citi expect the Bank to hold at 2.25%. Markets aren’t so sure. After the inflation report, traders raised the odds of a quarter-point hike to roughly 80%, up from about 30% before it.

Housing is already feeling the uncertainty. Fixed mortgage rates have climbed with bond yields since the spring. Home sales fell 2.3% from August to September and were 7.7% lower than a year ago, and the national average price came in at $666,538, down 1.6%. CREA has now cut its 2026 sales forecast for the third straight quarter and expects 5.2% fewer sales than last year.

A few things worth knowing:

👉 If you’re buying in the next few months, talk to a mortgage professional about a pre-approval with a rate hold before October 28th. If rates move up, a held rate can protect your budget while you shop.

👉 If you’re selling, expect some buyers to pause until they see what the Bank does. Price for the market you’re in today, especially in Ontario, where prices dipped again in September. Serious buyers are still out there, and there’s less competition for their attention.

👉 If you’re staying put, look at your mortgage now if you have a variable rate or a renewal coming up in the next year. A hike would show up quickly in variable payments, and reviewing your options early gives you more room than waiting for the renewal letter.

Curious what a rate increase would mean for your situation? Reply to this email and we’ll walk through it with you.

Talk soon,
CHRIS, PATRIC, JULIE, JASMINE, KRISTI & BRELL

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