I'm hearing the same question a lot right now. Should I lock a rate today, or wait to see what the Bank of Canada does on October 28? And then, fixed or variable? Here is how I answer it, with the numbers, and more to the point, what you can actually do between now and then.

Where rates stand twelve days out

The Bank of Canada left its policy rate at 2.25% on September 2. That was its seventh hold in a row, and the rate hasn't moved since October 2025. Bank prime stays at 4.45%. The next decision lands on October 28, and this one comes with a Monetary Policy Report, so fresh projections. Markets lean toward another hold, but not unanimously. A small share still bets on a hike. Nothing is settled yet.

On the mortgage side, the gap between fixed and variable is wide right now. The best insured five-year fixed rates run around 4.6%, while the big-bank average sits above 5%. The best insured variable is under 3.5%, close to 3.4%, which works out to prime minus about a point. A gap of more than a point between the two moves the monthly payment in real terms. Worth noting too: fixed rates have edged up a little this fall, not melted away.

2.25%
Policy rate held, seventh time in a row
Oct. 28
Next Bank of Canada decision
~1 pt
Current gap between the best fixed and the best variable (5-year)

Fixed or variable, at these levels

Variable costs less today, no question. But it follows prime. If the Bank surprises everyone on October 28 with a hike, your payment goes up the month after. If it holds, you keep the advantage. Variable suits someone who has cushion in the budget and can take a bit of movement without losing sleep.

Fixed buys you peace of mind instead. At 4.6%, you know exactly what you pay for five years, whatever the Bank decides. You pay a little more than variable up front for that certainty. For a first purchase or a tight budget, it's often the right call, simply because you sleep better. There is no single answer here. There is your tolerance for risk and the room you have each month.

Variable is cheaper today. Fixed tells you exactly what you'll pay three years from now. The right choice comes down to your cushion, not to a forecast.

The renewal wall

There's another group the October 28 decision hits head-on: people renewing. A lot of owners who signed in 2020 or 2021 at rates under 2% are coming up for renewal in 2025 and 2026. Even with prime at 4.45%, renewing today almost always means a higher payment than before. If that's you, my advice is simple. Shop three or four months ahead, ask your institution for an offer and compare it elsewhere, and don't sign the first renewal slip that lands in your mailbox. Between the automatic offer and a negotiated rate, the difference often runs into thousands of dollars over the term.

What this means for you

  • You're buying: get pre-approved with a rate hold before October 28. A pre-approval locks a rate for 90 to 120 days. If rates rise, you keep yours; if they fall, most lenders give you the lower one. You lose nothing by having it in hand, and with 4,050 homes for sale on the South Shore in September, you have time to look without pressure. A buyer who is pre-approved and rate-held also negotiates from a stronger spot.
  • You're selling: your buyer is sensitive to the rate, far more than to the Bank's press release. With 32% more listings than a year earlier on the South Shore, it's your price that decides, not the October 28 decision. Price realistically, and know that the buyer who is already pre-approved and rate-held is your most serious offer. I get into this in my piece on buying this fall or waiting for spring.
  • You're investing: if your mortgage on an income property is variable, a hike on October 28 eats into your cash flow the very next month. If you're renewing, redo your numbers at today's rate, not the one from 2021. A plex that worked at 1.9% doesn't necessarily work at 4.6%. Run your cap rate on the real cost of financing before you offer, not on the one you remember.

Nobody can promise you what the Bank will do on October 28, and that's not really where your file gets decided anyway. What counts is showing up prepared: rate hold in hand, numbers run at the real rate, and a clear sense of what you can afford. If you'd like to go through your numbers together before the decision, request a free evaluation or write to me. You can also read my take on whether the rate could rise this fall.

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