Will Mortgage Rates Go Down in 2027?

As of October 21, 2026, the Bank of Canada’s policy rate is 2.25%, and it has not moved in a year. No official source gives the date of a next cut, and the Bank commits to no direction. What can be checked: the schedule of announcements through the end of 2027, the bond yields that guide fixed rates, the Bank’s inflation projection and the cost of a quarter point on a house in Laval or Montreal.

Where the policy rate stands as of October 21, 2026

2.25% since October 29, 2025. That day, the Bank of Canada lowered its rate by 0.25 percentage point. The seven announcements that followed held it there, the most recent on September 2, 2026. Since 2021, a change takes effect the day after it is announced.

What the Bank wrote on September 2. CPI inflation has held around 3% in recent months, mainly because of gasoline; excluding gasoline, it was 2.2% in July. The Bank adds that “upside risks around the Bank’s inflation outlook have increased.” Its conclusion leans neither way: Governing Council “stands ready to adjust monetary policy as needed.”

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. Ten announcements remain scheduled between now and the end of 2027:

Source: the Bank of Canada’s “Policy interest rate” page, consulted October 21, 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. After October 28, check the decision on the Bank’s website.

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. As of October 14, 2026, it recorded a prime rate of 4.45% at the major chartered banks. Without a new decision, 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: a cut in the policy rate would not mechanically lower a 5-year fixed rate, and the reverse is also true.

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, as of October 21, 2026, is the July edition.

Inflation. Under that projection, CPI inflation was expected to slow gradually and return to around 2% in early 2027, “subject to the path of oil and gasoline prices,” then average around 2% in 2027 and in 2028.

The rate. In July, Governing Council judged that “the current level of the policy rate remains appropriate to support the economic recovery and bring inflation back to the 2% target.”

A projection is not a promise: the Bank itself makes it conditional on the price of oil, it covers inflation and not your rate, and the October 28 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 21, a 60-day hold covers the October 28 and December 9 announcements; at 130 days, the January 27, 2027 announcement as well. Ask whether you will automatically get the lowest rate if rates fall during that period, 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.

Frequently asked questions

Will the Bank of Canada cut its rate on October 28, 2026? No official source says so before the announcement. The September 2 press release gives no direction. The decision and the October Report come out the same day.

If the policy rate goes down, does my fixed rate go down too? Not automatically: it depends mainly on the bond market. Since the last cut, on October 29, 2025, the 5-year yield has gone from 2.73% to 3.62% without the policy rate moving.

My mortgage renews in 2027: fixed or variable? The decision is yours, with your lender or your mortgage broker. The variable rate follows the prime rate, and therefore the Bank’s decisions; the fixed rate depends mainly on the bond market at the time of signing. Compare two dated offers, for the same term.

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.

Contact Georges