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Oct 21, 2026 4:32 PM - Connect Newsroom - Ramandeep Kaur with files from The Canadian Press
Canada’s real estate market could face renewed pressure if the Bank of Canada raises interest rates, with mortgage and lending experts warning that higher borrowing costs could discourage homebuyers and push house prices lower.
The central bank has not raised interest rates since July 2023. While it is expected to keep its benchmark rate unchanged for an eighth consecutive decision, many economists and traders believe rate hikes could be on the horizon as policymakers seek to contain inflation.
The Bank of Canada’s policy rate has remained at 2.25% since a 0.25-percentage-point cut in October 2025.
A Bloomberg survey suggests the bank will hold rates steady. However, Bank of Montreal, RBC Dominion Securities and Desjardins Group have revised their forecasts for the October 28 announcement, shifting from expecting no change to anticipating a rate hike.
Experts say Canada’s housing market is already under significant pressure, with home sales running at levels not seen in approximately 25 years.
