What the Bank of Canada Hike Means for Your Mortgage Renewal

Updated October 31, 2026

On October 28, 2026, the Bank of Canada raised its overnight policy rate by 25 basis points to 2.50% – its first increase since 2023. Canada’s six largest banks (RBC, TD, BMO, CIBC, Scotiabank and National Bank) followed the same afternoon, moving their prime rate from 4.45% to 4.70%, effective October 29. If your mortgage is coming up for renewal in Ottawa, here is what changed, what did not, and what to do about it.

Quick summary

• Policy rate: 2.50% (up 0.25%, announced October 28, 2026).
• Big-bank prime: 4.70% (up from 4.45%, effective October 29, 2026).
• Variable-rate and HELOC borrowers feel it right away; fixed-rate borrowers feel it at renewal.
• Renewing in the next 12 months? Start comparing options about 120 days before your maturity date.

Who is affected right now

Adjustable-payment variable mortgages: your payment rises with prime, usually on your next payment cycle.

Fixed-payment variable mortgages: your payment stays the same, but more of each payment now goes to interest and less to principal. Check your lender statement for your trigger point.

HELOCs and other prime-linked credit: the interest rate on your balance goes up by the same quarter point.

Fixed-rate mortgages: nothing changes until your term ends. That is exactly why your renewal deserves attention now.

Fixed vs variable at renewal

Fixed mortgage rates follow the bond market rather than the Bank of Canada directly, so they can move before or after a rate announcement. Variable rates move with prime. At renewal, the right choice depends on more than which rate is lower today:

• Payment comfort: could your budget handle another increase if prime rises again? If not, a fixed term buys certainty.
• Flexibility: variable mortgages typically carry a smaller penalty (often three months’ interest) if you sell or refinance early. Fixed-rate penalties can be much larger.
• Your plans: moving, renovating, or consolidating debt in the next few years? A shorter term or a variable rate may fit better.
• Term length: you are not limited to five years. One-, two- and three-year terms let you renew again sooner.

Your 120-day renewal plan

1. 120 days out: find your maturity date, balance and current rate. Many lenders let you lock a rate hold roughly 120 days ahead, which protects you if rates rise further while still letting you take a lower rate if they drop.
2. 90 days out: get a renewal review from a broker who can compare many lenders, not just your current one. Your lender’s first renewal letter is rarely its best offer.
3. 60 days out: decide fixed or variable and the term. Consider whether to refinance (for renovations or debt consolidation) at the same time.
4. 30 days out: finalize paperwork. If you do nothing, many lenders auto-renew you at their posted terms.

The Ottawa angle

Ottawa’s large public-sector workforce means many households have stable incomes and are well placed to switch lenders at renewal. Switching an insured mortgage to a new lender at maturity generally does not require requalifying at the stress test, which can open up better offers. Owners of rental properties and cottages in Eastern Ontario should review the whole picture, since prime-linked HELOCs on those properties also just got more expensive.

Frequently asked questions

Did the Bank of Canada raise rates on October 28, 2026?

Yes. The overnight rate target rose 25 basis points to 2.50%.

What is the prime rate now?

The big six banks moved prime to 4.70%, effective October 29, 2026.

Will my fixed mortgage payment go up?

Not during your current term. The new rate environment applies when you renew.

When should I start shopping my renewal?

About 120 days before maturity, so you can secure a rate hold and compare lenders without a deadline crunch.

Can I switch lenders at renewal?

Yes. Renewal is the one point where you can usually move your mortgage without a prepayment penalty.

Get a renewal review

We compare lenders across Canada and help you choose the term that fits your plans. Learn more on our Ottawa mortgage renewal page, or book a free mortgage renewal review. Questions? Email hello@iancharlebois.ca.

Sources: Bank of Canada, October 28, 2026; National Bank prime rate announcement. This article is general information, not personalized financial advice.