Will Mortgage Rates Go Down in 2027?

As of October 30, 2026, the Bank of Canada’s policy rate is 2.5%. The Bank raised it by 0.25 percentage point on October 28, its first increase since July 2023, and it writes that a further increase may be needed. No official source gives the date of a next cut. What can be checked: the schedule of announcements through the end of 2027, the bond yields that guide fixed rates, the Bank’s new inflation projection and the cost of a quarter point on a house in Laval or Montreal.

Where the policy rate stands as of October 30, 2026

2.5% since October 28, 2026. That day, the Bank of Canada raised its rate by 0.25 percentage point. It had been 2.25% since the cut of October 29, 2025, and the seven announcements that followed had held it there. Since 2021, a change takes effect the day after it is announced, in this case October 29.

What the Bank wrote on October 28. The increase aims to reduce the risk that persistently high energy prices spread to the prices of other goods and services. Inflation has been around 3% since April, and the Bank expects about 3.5% by the end of the year; excluding gasoline, it was 2.2% in September, and measures of core inflation remain close to 2%. Looking ahead, the Bank says a further increase in the policy rate may be needed, and that it will proceed carefully, one decision at a time.

What the increase changes right away. On October 28, RBC, TD, BMO, CIBC and National Bank raised their prime rate from 4.45% to 4.70%, effective October 29. A variable-rate mortgage follows that rate: depending on the contract, either the payment goes up, or the interest share of a payment that does not change. A fixed-rate mortgage already in place does not move until renewal.

The Bank of Canada’s next announcements, through the end of 2027

The Bank announces its rate on eight pre-set dates a year, a system adopted in 2000. Its 2027 schedule is already online. Nine announcements remain scheduled between now and the end of 2027:

Source: the Bank of Canada’s “Policy interest rate” page, consulted October 30, 2026.

An off-schedule date remains possible. The Bank can adjust its rate on other dates “in special circumstances,” as it did on March 13 and 27, 2020.

Variable and fixed rates do not follow the same signal

The variable rate follows the dates in the table. According to the Bank of Canada, changes to the policy rate lead to similar movements in the prime rate, the basis for variable mortgage rates. October 28 showed it: a 0.25 point increase in the policy rate, a 0.25 point increase in the major banks’ prime rate, from 4.45% to 4.70%. Between two decisions, the variable rate stays put: from November 2025 to July 2026, the average rate charged on uninsured variable-rate mortgages stayed between 3.84% and 3.90%.

The fixed rate can move on any day. The Bank explains that the lender’s cost of funding is “what most influences your mortgage rate.” In its renewal simulations, its staff set the rate on a fixed-rate mortgage as a spread above the expected yield on Government of Canada bonds. And whether the policy rate moves or not, those yields do:

On September 2, the Bank wrote it itself: “Long-term bond yields have risen globally, including in Canada.” The practical consequence: an increase in the policy rate does not mechanically raise a 5-year fixed rate, and a cut would not mechanically lower it either.

Will mortgage rates go down? What the Bank projects

The Bank does not answer that question. It publishes a projection in its Monetary Policy Report, the most recent of which is the October 28, 2026 edition.

Inflation. According to that Report, inflation in Canada is expected to stay above 3% for most of 2027, then return close to 2% around the middle of 2028. In July, the Bank still expected a return to around 2% in early 2027: the return to target has slipped by about a year and a half. The Bank attributes this to persistently high energy and import prices, and assumes oil prices will decline gradually.

Growth and housing. Growth is expected to firm to about 2% in 2027 and 2028. For housing, the Bank expects activity to remain relatively weak.

The rate. In July, Governing Council judged the level of the rate appropriate. In October, it raised it, and it does not rule out further increases. No cut is mentioned.

A projection is not a promise: the Bank itself makes it conditional on energy prices and on the trade relationship with the United States, it covers inflation and not your rate, and the January 27, 2027 projection will replace it.

What a quarter point is worth on a house in Laval or Montreal

A calculation, not a forecast. The assumptions:

• The price. The single-family median for the third quarter of 2026, according to the barometer of APCIQ (the Quebec Professional Association of Real Estate Brokers): $630,000 in Laval, on 548 sales, and $811,000 on the Island of Montreal, on 1,003 sales.
• A 20% down payment. Below that threshold, the Financial Consumer Agency of Canada (FCAC) says mortgage loan insurance is usually required, and its premium would change the calculation.
• The starting rate: 4.49%. This is the average rate charged in July 2026 on uninsured fixed-rate mortgages of 5 years and over, according to the Bank of Canada. That average covers new loans, renewals and refinancings.
• The rest. A 25-year amortization, monthly payments, interest calculated half-yearly, one of the two bases allowed by section 6 of the Interest Act. No taxes, no home insurance.

The same quarter point, seen another way. At the same $2,787 payment, going from 4.49% to 4.74% reduces the loan you can get in Laval by about $12,400. To keep that payment with a 20% down payment, the purchase price would have to be about $15,500 lower. On the island, the gap reaches about $16,000 of loan and $20,000 of price.

Redo the calculation with your own price in the mortgage calculator. Medians by neighbourhood are in the Laval real estate market by sector.

Renewing in 2026 or 2027: what the data show

The Bank of Canada put figures on the renewal wave in its May 2026 Financial Stability Report:

• The last pandemic-era mortgages. In the 12 months following the report, the last five-year fixed-payment mortgages taken out during the pandemic will be renewed. They represent roughly 12% of outstanding mortgages in Canada, and their payments will rise by about 15% on average.
• The more recent mortgages. About 14% of outstanding mortgages, variable-rate loans and shorter fixed-rate loans taken out after the rate increases of 2022 and 2023, renew over the same period. On average, their payment does not change.
• The end of the wave. According to the Bank, “by the second half of 2027, nearly all mortgage holders facing significant payment increases will have renewed their mortgage.”

Two caveats. The report gives no figure for Quebec or Montreal. And its calculations rest on market expectations as of May 19, 2026, when the 5-year yield was 3.35%, compared with 3.62% on October 20.

Breaking a current mortgage to take advantage of a cut? First ask in writing for the exact amount of the penalty, then compare it with the savings over the remaining months: the method is in how the penalty for breaking a mortgage is calculated.

What a borrower controls while waiting for rates to drop

The rate hold. The FCAC says a pre-approval can hold a rate for 60 to 130 days, depending on the lender, without guaranteeing the loan itself. Obtained on October 30, a 60-day hold covers the December 9 announcement; at 130 days, the January 27 and March 3, 2027 announcements as well. The held rate stays yours if rates rise during that period. Also ask whether you will automatically get the lowest rate if they fall, as the FCAC suggests. The other limits are covered in what a mortgage pre-approval does not guarantee.

The length of the term. The term sets the date of your next return to the market: a 5-year term signed in the fall of 2026 renews in the fall of 2031, a 3-year term in 2029.

The choice between fixed and variable. In July 2026, on uninsured mortgages, the average gap was 0.63 percentage point: 3.86% variable, 4.49% fixed for 5 years and over. I am a real estate broker, not a mortgage broker: this choice is made with your lender or a mortgage broker.

To go further, read the path from the policy rate to your payment and what separates renewing, transferring and refinancing.

Buying in Laval or Montreal and want to know what a quarter point changes for the property you have in mind? Write to me. Service in French, English and Arabic; the financing itself is decided with your lender or your mortgage broker.

Georges Matar

Residential Real Estate Broker · RE/MAX DU CARTIER INC.

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