Did the Bank of Canada raise interest rates in October 2026? Yes. On October 28, 2026, the Bank of Canada raised its key rate by 0.25% to 2.5%, its first increase in three years, citing energy-driven inflation.

After seven announcements in a row with no change, the Bank of Canada moved this morning. The overnight rate is now 2.5%, up from the 2.25% it had held since October 2025. If you’re watching the housing market in Leamington, Kingsville, Wheatley, or anywhere in Windsor-Essex, here’s the plain-English version of what happened and what it means for you.

Why did the Bank of Canada raise rates?

The short answer is inflation. Canada’s annual inflation rate hit 3.2% in September, which is above the Bank’s 1% to 3% target range. Almost all of that came from energy and energy-related transportation costs.

The Bank’s concern is that high energy prices could spread into everything else we buy. Governor Tiff Macklem said the increase was needed to reduce that risk. The Bank also flagged new U.S. tariffs as a drag on the economy heading into the end of the year.

You can read the official announcement on the Bank of Canada website.

Will rates go up again?

Possibly. Macklem said there could be a need to raise rates further but that the Bank will proceed carefully given the uncertainty. The Bank now expects inflation to end 2026 around 3.5%, stay near 3% for most of 2027, and return close to 2% by mid-2028.

Not everyone agreed with today’s move. Some economists pointed out that core inflation is sitting around 2% and worried a hike could slow a modest recovery. The next announcement is December 9, 2026.

What this means if you have a variable rate mortgage

Variable mortgages are tied to your lender’s prime rate, and the big banks usually raise prime by the same amount after a Bank of Canada hike. If yours does, expect your payment or interest cost to rise.

As a rough example, on a $400,000 mortgage with a 25-year amortization, a 0.25% increase adds about $55 a month. Your lender will confirm your actual new payment.

What this means if you’re buying

Fixed mortgage rates follow the bond market, not the Bank’s rate directly, so they won’t change overnight. But with the Bank signalling more hikes are possible, waiting for rates to drop may not pay off in the near term.

The smart move right now is to get pre-approved. A pre-approval can hold a rate for a set period while you shop, which protects you if rates climb again before you find the right home. If you’re relocating to Essex County from the GTA or elsewhere in Ontario, this matters even more, because your search may take a little longer.

What this means if you’re selling

A quarter-point hike won’t change the market on its own, but it does squeeze some buyers’ budgets. Some buyers who were stretching may now qualify for a little less, and others will be more cautious.

For sellers in Leamington, Kingsville, and Wheatley, that makes pricing right from day one more important than ever. A well-priced home still attracts serious buyers. An overpriced one sits, and every rate announcement gives buyers another reason to wait.

Planning a move to Windsor-Essex?

If you’re thinking about relocating, my free guides walk you through what each community is really like:

• Moving to Windsor-Essex, Ontario: The Complete Relocation Guide
• Relocating to Leamington Guide
• Moving to Kingsville Guide
• Wheatley Real Estate Guide 2026

Prefer video? Watch 11 Things Nobody Tells You About Leamington, 12 Things Nobody Tells You About Kingsville, or 12 Things Nobody Tells You About Wheatley.

Frequently asked questions

What is the Bank of Canada rate now?

As of October 28, 2026, the Bank of Canada’s overnight rate is 2.5%, up from 2.25%. It’s the first increase since July 2023.

When is the next Bank of Canada announcement?

The next scheduled rate announcement is Wednesday, December 9, 2026, at 9:45 a.m. ET.

Is it still a good time to buy a home in Windsor-Essex?

It depends on your situation, not the headlines. If you’re financially ready and plan to stay put, a small rate change matters less than buying the right home at the right price. Getting pre-approved first gives you a clear budget and protects you from further increases.

Related reading

• Are Home Prices Dropping in Windsor-Essex?
• Are Home Prices Dropping in Leamington, Ontario?
• Is Kingsville, Ontario a Good Place to Buy in 2026?

Have questions about how this affects your move?

Whether you’re buying, selling, or relocating, I’m happy to walk you through what today’s rate change means for your specific situation. I’m Linda Hakr, REALTOR® with JUMP Realty Inc., serving Leamington, Kingsville, Wheatley, and all of Windsor-Essex and Chatham-Kent. I’m a three-time Top Producer with 40+ five-star Google reviews. Call or text 519-654-6695, or email linda.hakr@jumprealty.ca.

Cheers, Linda Hakr, REALTOR®.