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Bank of Canada Hikes Rates to 2.5%

By Drooid · Oct 28, 2026 · How we work

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Summary

Bank of Canada raised overnight policy rate by 25 basis points to 2.5% on Oct 28, 2026.
Governor Tiff Macklem said the hike aims to prevent soaring energy prices from spilling into broader inflation.
The bank lifted its 2027 inflation forecast to 3.1% from 2.0% projected in July.
It raised the 2026 growth outlook to 1.0% and the 2027-2028 outlook to 2.0%.

Summary

The 0.25% BoC rate hike raises monthly interest on a $59,000 HELOC by $12 to $254.
Variable-rate auto loans average $58,500, with about a quarter holding negative equity, increasing exposure to higher rates.
A variable mortgage on a $666,538 home with 10% down costs $82 more per month after the hike.
Bond yields may rise if the BoC signals further hikes, lowering bond fund values while GIC rates top 4%.

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Bank of Canada raised overnight policy rate by 25 basis points to 2.5% on Oct 28, 2026.
Governor Tiff Macklem said the hike aims to prevent soaring energy prices from spilling into broader inflation.
The bank lifted its 2027 inflation forecast to 3.1% from 2.0% projected in July.
It raised the 2026 growth outlook to 1.0% and the 2027-2028 outlook to 2.0%.

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