Canada's Big Six keep raising mortgage rates — and RBC says affordability gains are ending

Canada's major banks spent last week raising borrowing costs even as the economy softened: RBC lifted fixed rates by 10 to 20 basis points, BMO raised its 3- and 5-year offers, and CIBC lifted fixed rates 15 to 20 basis points plus 10 basis points on advertised variable rates, all repricing off September's bond-yield surge, Canadian Mortgage Trends reported.

RBC Economics warned that its affordability measure — 52.8 per cent of household income needed to own a home — posted its smallest improvement in almost a year, and expects renewed pressure into 2027.

The timing is punishing. Roughly 1.15 million Canadian mortgages renew in 2026 and another 940,000 in 2027, according to CMHC figures cited in industry reporting. Borrowers are already shifting away from 5-year terms — just 8.8 per cent of July originations, a record low, per National Bank — which means policy-rate changes bite household budgets faster.

Housing markets are cooling in response: Toronto sales fell 5.2 per cent month over month, Vancouver's benchmark price is down 5.5 per cent year over year at $1,075,900, and asking rents have fallen for a 24th straight month, down 4.2 per cent year over year to $2,034.

Best advertised insured 5-year fixed rates are now in the low-4 per cent range, though figures differ by source and date — Ratehub cited 4.34 per cent on Oct. 7; a mortgage-broker board showed 4.14 per cent on Oct. 9. Separately, Ottawa unveiled a $2-billion home retrofit plan offering heat-pump rebates of up to $10,000 for below-median-income households.

The Bank of Canada, holding at 2.25 per cent, next decides Oct. 28.