On October 28, 2026 the Bank of Canada raised its target for the overnight rate by 25 basis points, to 2.50 per cent. The change takes effect today. The Bank Rate is now 2.75 per cent and the deposit rate 2.45 per cent.
This is the part worth sitting with. The policy rate had been 2.25 per cent since October 30, 2025, and before that it was coming down, not going up. It was 2.50 per cent in September 2025 and 2.75 per cent that August, both on the way lower. So yesterday was not another step in a cutting cycle. It was the first increase since July 13, 2023, when the rate went from 4.75 to 5.00 per cent on the way up, and the Bank said in the same release that there could be a need to increase the policy rate further, while adding that it will proceed carefully.
The reasoning is inflation, not housing. Headline inflation has run near 3 per cent since April and the Bank expects it to reach about 3.5 per cent by the end of the year. Second quarter growth came in at 3.3 per cent. The Bank said it acted to reduce the risk that high energy prices spread into the prices of other goods and services. On housing it said only that it expects the sector to remain relatively weak. Nothing in the decision was aimed at this market.
What changes right away
Anything priced off prime. That means variable rate mortgages, home equity lines of credit, and most unsecured lines. Chartered bank prime was 4.45 per cent in the Bank of Canada's weekly reading for October 28, before the increase took effect. Lenders set their own prime, so the number to plan around is the one your lender publishes, not a figure from a news story.
The arithmetic below is mine, not a lender quote. On a 25 year amortization, 25 basis points works out to roughly $13.90 a month for every $100,000 owing, for a rate moving from 4.00 to 4.25 per cent. Apply that to local benchmark prices from the Fraser Valley Real Estate Board's September 2026 package and it looks like this, at 20 per cent down:
A Langley house at the September detached benchmark of $1.471M carries a mortgage of about $1.177M. The increase is roughly $164 a month, close to $1,960 a year. A Langley townhouse at the $802,600 benchmark is about $89 a month. A Langley condo at $525,900 is about $58. In South Surrey and White Rock, where the detached benchmark is $1.613M, it is about $179 a month. The townhouse figure there, $797,100, lands in the same place as Langley's.
Whether you feel that as a higher payment or a slower payoff depends on your contract. Some variable mortgages hold the payment steady and send more of it to interest, which stretches the amortization. Others adjust the payment. Your mortgage statement will say which one you have.
What it does to qualifying
More than it does to payments, for anyone still shopping. The minimum qualifying rate for an uninsured mortgage is set by OSFI at the greater of the contract rate plus 2 per cent or 5.25 per cent. When the contract rate moves up 25 basis points, so does the rate you are tested at.
Again my own arithmetic: the same monthly payment supports about 2.3 per cent less mortgage after a 25 basis point move in the qualifying rate. On a pre-approval around $546,000 that is roughly $12,700 of borrowing power. It is not dramatic. It is also not nothing when you are shopping at the top of your range, and it is the reason to re-run the numbers rather than assume last month's pre-approval still holds. Start with the mortgage affordability figures, then get pre-approved for a mortgage in BC on current rates.
What it does not change
Fixed rates, at least not directly. Fixed mortgage pricing follows bond yields rather than the policy rate. The five year Government of Canada benchmark yield was 3.62 per cent on October 28, up from 3.50 per cent on October 22. That drift was already underway before the announcement, which is the usual pattern. Bond markets price the decision in advance, so by the time the Bank confirms it, fixed rates have usually already moved. If you were quoted a fixed rate last week, the quote is probably stale for reasons that predate yesterday.
It also does not change the balance of this market, which is the thing most buyers here are actually weighing.
The local context, which is larger than 25 basis points
The Fraser Valley board recorded 922 sales in September 2026, down 4 per cent from September 2025 and 2 per cent from August. There were 9,763 active listings, 31 per cent above the ten year seasonal average. New listings came in at 2,818. The board describes the region as having spent most of the last two years in a buyer's market, with no change in September, and defines balanced as a sales to active listings ratio between 12 and 20 per cent.
Prices reflect that. The Fraser Valley composite benchmark was $861,300 in September, down 7.2 per cent over twelve months. The Langley composite was $941,800, down 6.2 per cent year over year, with detached at $1.471M, down 6.7 per cent. In South Surrey and White Rock the composite was $990,300, down 7.3 per cent, with detached at $1.613M, down 7.4 per cent and down 17.9 per cent over three years. The board's chair put the single family benchmark at $460,000 below its March 2022 peak.
Hold those two numbers next to each other. On a Langley house at the benchmark, yesterday's increase costs about $164 a month. The same house costs about $105,000 less than it did a year ago. One of those is a rounding error against the other. If a rate decision is what has been keeping you out of this market, the rate decision is not the thing that has been keeping you out.
The reverse case is real too, and I will not pretend otherwise. The Bank left the door open to raising again, with the next announcement on December 9. If a second increase comes, qualifying gets tighter again, and the people it bites are buyers already stretched and owners carrying variable debt. Neither of those groups is helped by waiting for clarity that the Bank itself says it does not have.
What I would actually do
If you hold a variable mortgage, call your lender this week and ask what happens to your payment and your amortization, specifically. Not in general. Ask about your contract.
If you are mid purchase with a rate hold, check the expiry date. A hold taken before yesterday is worth more today than it was on Tuesday.
If you are shopping, redo the pre-approval and then keep shopping. Inventory is 31 per cent above the seasonal norm and prices are down year over year across every property type in both markets. That is a better set of conditions than most buyers have had since 2022, and a quarter point does not undo it.
If you are selling, nothing here argues for racing to list. It does argue for pricing to the September data rather than to last spring, because buyer budgets just got slightly smaller and there are 9,763 other listings.
Sources
Bank of Canada interest rate announcement of October 28, 2026, for the policy rate, the Bank Rate, the deposit rate, the inflation and growth figures and the Governing Council's language. Bank of Canada rate series for the history of the policy rate, chartered bank prime for the week of October 28, 2026, and the five year Government of Canada benchmark bond yield. Office of the Superintendent of Financial Institutions, minimum qualifying rate for uninsured mortgages. Fraser Valley Real Estate Board September 2026 statistics package, released October 5, 2026, for sales, listings, benchmark prices and the board's own commentary. Payment and borrowing power figures are my own arithmetic on a 25 year amortization, shown to illustrate scale, and are not a lender quote. Checked October 29, 2026. Not mortgage advice. Your lender's terms govern.