Variable-rate mortgage and HELOC borrowers face higher costs today as Canada’s big six banks move
Canada’s variable-rate mortgage holders and home equity line of credit (HELOC) borrowers are paying more as of today, after the country’s six largest banks put a new prime lending rate of 4.70% into effect.
The move follows the Bank of Canada’s (BoC) decision to raise its overnight rate by 25 basis points to 2.50% on Wednesday, its first increase since 2023.
The Royal Bank of Canada (RBC), Toronto-Dominion Bank (TD), Bank of Montreal (BMO), Canadian Imperial Bank of Commerce (CIBC), Bank of Nova Scotia (Scotiabank), and National Bank of Canada each implemented the quarter-point increase, moving in lockstep from a prime rate of 4.45% that had been in place since October 2025.
TD also raised its separate mortgage prime rate — the benchmark used to price its variable-rate mortgage products — to 4.85% from 4.60%, a spread that sits 15 basis points above its standard prime.
For borrowers on fixed-payment variable mortgages, today’s change means a larger share of each instalment goes toward interest rather than principal. Those on adjustable-payment structures will see monthly costs rise immediately.
A housing market that wasn’t moving before today
The effective rate increase reaches a market that had already gone quiet.
Phil Soper, president and chief executive of Royal LePage in Toronto, told Canadian Mortgage Professional this month that anticipated buyer pull-ahead had not materialised even as rate-hike speculation intensified.
“You’d see some people that were planning to get into the market in the spring of 2027, for example, jumping in now to get ahead of anticipated higher borrowing costs. Yet we’re not seeing material changes in the trajectory of transaction volumes. It’s very flat,” Soper said.
Benjamin Reitzes of BMO says the Bank of Canada's first rate hike in more than three years may not be its last, with future decisions likely hinging on economic growth, inflation trends, and incoming data over the months ahead. https://t.co/lcW0HncB9d
— Canadian Mortgage Professional Magazine (@CMPmagazine) October 29, 2026
What brokers need to tell clients today
Leah Zlatkin, mortgage broker and expert at LowestRates.ca, said in April that borrower psychology still carries heavy residue from the previous hiking cycle.
“Most borrowers still prefer the certainty of fixed payments, especially after the sharp increases to variable rates during the Bank of Canada’s rate-hiking cycle in 2022 and 2023,” Zlatkin said. That hesitancy only deepens with today’s move confirmed.
“Variable rates come with uncertainty,” she added. “Borrowers need to be comfortable with the possibility that rates could move higher again depending on how the economic environment evolves.”
Victor Tran, spokesperson at Rates.ca, shared earlier this year that despite growing curiosity around variable products, fixed-rate mortgages still dominate client decisions.
“Most households are still opting for fixed because it offers predictability in an environment where rate direction isn’t guaranteed,” Tran said.
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