Higher for Longer Is Back: What It Means for Your Mortgage and Your Move

“Higher for longer” was the phrase of 2023. It is back — and this time it arrived with an actual rate hike attached.

What happened on October 28 (the 30-second version)

On October 28, the Bank of Canada raised its policy rate a quarter point to 2.50%, its first hike since July 2023. The Bank’s stated reason: energy prices look higher for longer, and businesses are expected to pass more of their costs to consumers, which keeps inflation persistent. The Bank also said it will decide one meeting at a time — no promised path, but no promise this was the last move either.

The backdrop helps explain why the Bank moved. September employment fell by 68,300 jobs and unemployment rose to 6.5%, yet headline inflation came in at 3.1% in September, with core measures at 1.9% (CPI-median) and 1.8% (CPI-trim). Growth forecasts were actually revised up — 1.0% for 2026 (from 0.7%) and 2.0% for 2027 and 2028 (from 1.8%) — but U.S. tariffs are expected to slow growth in the fourth quarter of 2026 before fading. In other words: an economy that is neither booming nor breaking, with inflation that refuses to sit down. That is exactly the combination that produces “higher for longer.”

Markets have taken the hint. Trading implies roughly a 65% chance of another hike in December, with a further move fully priced by January 2027 (per CBRE’s October commentary). Treat that as a market guess, not a forecast — but it is the guess your mortgage pricing is built on right now.

Variable vs fixed, in one paragraph each

Variable follows prime. Prime moved from 4.45% to 4.70% after the hike. If your mortgage is variable, your payment or your amortization already reflects that. If your pre-approval is variable, the amount you were approved for in September is not the amount you can borrow in November — refresh it before you shop.

Fixed follows the bond market, not the Bank of Canada. Bond yields had already been rising for weeks before October 28, which is why fixed rates were climbing while the Bank was still on hold. A fixed rate is a bet on where bonds go over your term; a variable rate is a bet on where the Bank goes. Neither is “right” in general — the right one depends on your cash flow, your risk tolerance, and how long you plan to stay in the home. Get both quoted on the same property, in writing, and compare the monthly payment, not the headline rate.

The December 9 decision: what to watch

The Bank’s next decision is December 9. Two data points between now and then will do most of the talking: the next jobs report and the next inflation reading. A hot inflation print strengthens the case for the December hike markets are pricing. A soft jobs report complicates it. You do not need to become an economist — you need to know that if a second hike lands, it lands on everyone at once, and the buyers and sellers who already have their financing and pricing decided will be the ones who move cleanly through it.

One commercial footnote, because it explains something you may hear from investors: in the third quarter, Canadian multifamily was the only major property type where cap rates rose, even marginally, with a national all-properties cap-rate spread of 256 basis points. That is an investment-market signal, not a housing forecast — but it is a reminder that the same higher-for-longer yields pressuring mortgages are also repricing every other kind of real estate. Residential does not live in a separate economy.

Buyer checklist

1. Refresh your pre-approval — the October 28 world is not the September world.
2. Compare variable and fixed on the same home, in writing, by monthly payment.
3. Stress-test yourself, not just the mortgage: could you carry the payment if rates rise one more quarter point?
4. Keep your closing buffer intact. In a higher-rate market, the buyers who close are the ones whose financing survives a surprise.
5. Read my Buy page for the full process — the checklist above is the rate half; the page is the whole move.

Seller checklist

1. Price for today’s borrowing costs, not last year’s. Your buyer’s monthly payment is your real competition.
2. Expect more financing conditions and longer subjects. Build that into your timeline, not your frustration.
3. Launch properly the first time — photography, presentation, exposure — because in a higher-rate market there is no frenzy to rescue a soft launch.
4. The full seller playbook is on my Sell page.

One honest boundary

I am a realtor, not a mortgage broker, and this article is not mortgage advice. Rates, products, and penalties differ by lender and by borrower, and the wrong product can cost more than the wrong rate. Before you lock anything in, talk to a licensed mortgage professional — and if you want, get in touch first and I will help you frame the questions to ask them, with your numbers in front of us.