BANK OF CANADA WARNS AGAINST WAITING TOO LONG ON RATE HIKES
Bank of Canada Governor Tiff Macklem said this week that the Bank does not want to be late raising interest rates if inflation proves stubborn. Speaking in Halifax on September 21, he said that moving too slowly would likely mean raising rates more quickly, and by more, than if the Bank had acted earlier.
Inflation has held near 3%, mostly because of higher gas prices, and Macklem said he expects it to edge up in the coming months if oil stays near $100 a barrel. At the same time, he warned that new U.S. tariffs could cut fourth-quarter economic growth roughly in half, to below 1%. The Bank’s policy rate remains at 2.25%, with prime at 4.45%.
Markets have shifted quickly. Before the September 2 decision, the odds of a hold were 94%. Markets now treat the October 28 decision as a coin flip. Economists at RBC and Desjardins still expect the Bank to hold for the rest of the year and raise rates in early 2027. The Bank will also debut a new forecasting model, called Prima, in its October Monetary Policy Report to help separate temporary inflation pressures from lasting ones.
Fixed rates are not waiting for the Bank. The five-year Government of Canada bond yield, the benchmark lenders use to price five-year fixed mortgages, rose from about 3.28% on August 24 to about 3.65% on September 25, touching 3.72% along the way.
What this means for your mortgage: variable rates move with the Bank of Canada, so October 28 is the date variable-rate holders are watching. Fixed rates follow the bond market, and that market has already moved higher over the past month. If you are renewing or buying in the months ahead, the fixed rate available to you is being shaped now, not on October 28.
CANADA’S HOUSING SHORTAGE HASN’T GONE AWAY
Aled ab Iorwerth, deputy chief economist at Canada Mortgage and Housing Corporation (CMHC), said this week that the only long-term solution to affordability is a lot more housing supply, built in higher-density forms. He also questioned whether the traditional condo model is the right way to deliver it.
CMHC’s Fall 2026 Housing Supply Report puts Canada’s supply gap at 187,000 to 238,000 homes a year. Edmonton is the only large Canadian market without a gap. In Toronto, family-sized units remain scarce, and a four-bedroom condo downtown is typically over 2,000 square feet and priced accordingly.
Ab Iorwerth tied this year’s price softness to uncertainty in the economy, not to any fundamental change in the housing system. His view is that if trade tensions ease and the economy recovers, affordability would start moving in the wrong direction again.
What this means for your mortgage: softer prices this year are being driven by economic uncertainty rather than a fix to the underlying shortage. For buyers weighing timing, that distinction matters. It’s one reason to base a purchase decision on your own budget and qualifying numbers rather than on a forecast of where prices go next.
RETIREMENT WEALTH STAYS LOCKED IN THE FAMILY HOME
Canada slipped to 21st in the 2026 Natixis Global Retirement Index, down from 10th a decade ago. The index, which ranks 44 countries on 18 indicators, flagged weaker scores for finances in retirement and material wellbeing, including rising household loan delinquencies.
Research from the C.D. Howe Institute found that the net worth of Canadian households aged 55 to 64 rose about 91% after inflation between 1999 and 2023. Most of that gain sits in housing, an asset that is hard to turn into steady retirement income. Meanwhile, a 2026 BMO survey found Canadians now believe they need about $1.7 million to retire comfortably, up from $1.54 million a year earlier. Fewer than half of non-retired Canadians (48%) have a workplace pension, according to a 2026 IG Wealth Management study.
What this means for your mortgage: for homeowners approaching retirement, the home is often the largest asset they have. The main options for using it are selling and downsizing, borrowing against the equity, or carrying a mortgage into retirement, and each comes with different costs and trade-offs. Qualifying also changes once employment income stops, because lenders assess pension and investment income differently. Planning the mortgage side before retirement, rather than after, keeps more of those options open.
WHERE THINGS STAND
If you have a variable rate, all eyes are on the October 28 Bank of Canada decision. If you have a fixed rate or you’re renewing soon, bond yields have moved higher over the past month and fixed pricing has followed. And if you’re nearing retirement, how your home fits into your income plan is a mortgage question as much as a financial one.
Call or text 249-480-1249. HumberBayMortgages.ca.
Simon Browning | Mortgage Agent Level 2 | BRX Mortgage 13463
Sources: Bank of Canada; Bloomberg/Canadian Mortgage Trends; Canadian Mortgage Professional; The Canadian Press; Government of Canada 5-year bond yield data; CMHC Fall 2026 Housing Supply Report; Natixis Investment Managers 2026 Global Retirement Index; C.D. Howe Institute; BMO Financial Group; IG Wealth Management; Wealth Professional