28 Oct

Rates Rise: What It Means for Your Mortgage

Your Next Move: Let’s Find the Mortgage Plan That Fits You

A rate announcement can leave you wondering whether your payment will change—or whether you should put your homebuying plans on hold.

On October 28, 2026, the Bank of Canada increased its overnight policy rate by 0.25 percentage points, from 2.25% to 2.50%. The impact on your household depends on your mortgage type, lender and plans.

In this update:

Why the Bank increased its rate
What economists and mortgage-industry voices expect next
How different mortgages are affected
A weekly payment example
What buyers and homeowners can do now

Why did the Bank increase its rate?

The Bank is concerned that persistently high energy costs will spread into the prices of other goods and services. It expects inflation to average approximately 3% in 2027 before returning to 2% around mid-2028.

It also sees stronger growth than previously projected, although trade uncertainty remains a risk. Its message: further increases may be necessary, but it will proceed carefully.

The next scheduled decision is December 9, 2026.

Source: Bank of Canada announcement.

What are economists and industry voices predicting?

There is no single agreed path ahead. Here is a comparison of published views leading into today’s decision, rather than post-announcement reactions.

Organization	Published outlook	What it means for planning
RBC Economics, week of October 26	Expected an October increase, with low conviction about timing. Its existing outlook assumed 100 basis points of increases during 2027, conditional on economic improvement.	Consider whether your budget could manage several increases, without treating that forecast as a certainty.
Desjardins, October outlook	Expected an October increase followed by another in January 2027.	Today’s increase may not be the last.
TD Economics, October 23	Considered an increase premature, citing a softer labour market and trade risks.	There are reasons the Bank could move more slowly than some forecasts suggest.
Dominion Lending Centres’ chief economist Sherry Cooper, reported October 19	Expected an October hold, while acknowledging tightening could be needed if inflation broadened and persisted.	Even experienced forecasters can differ on the timing.

Sources: RBC Economics, Desjardins, TD Economics, and Canadian Mortgage Professional.

From the mortgage industry, Ratehub.ca’s Clay Jarvis also highlighted the importance of bond yields for fixed mortgage pricing and suggested arranging a rate hold during uncertain conditions. That can provide protection while you assess a purchase or renewal, subject to the lender’s conditions.

Source: MoneySense’s October 22 mortgage outlook.

My takeaway: build a mortgage plan that works under more than one rate scenario. A forecast can inform your decision, but your household should not need it to be exactly right.

Will your mortgage payment change?

Variable rate with adjustable payments: Your payment generally changes when your lender changes the applicable prime rate. Confirm the amount and effective date with your lender.

Variable rate with fixed payments: Your regular payment may initially stay the same, but more can go toward interest and less toward principal. Contract provisions may eventually require an adjustment.

Existing fixed-rate mortgage: Today’s announcement does not change your contracted mortgage rate during its term.

Shopping for a new fixed rate or renewing: Fixed mortgage pricing is influenced by bond yields and lenders’ funding costs. It does not automatically move by the same amount as the Bank’s policy rate.

Sources: Financial Consumer Agency of Canada and TD’s explanation of fixed mortgage pricing.

Case study: What a rate increase could add to your weekly expenses

The last Bank of Canada rate decrease was October 29, 2025, when the policy rate fell to 2.25%. Today’s increase moves the policy rate back to 2.50%.

Sources: October 2025 announcement and October 2026 announcement.

To put a payment increase into perspective, consider an illustrative scenario in which a homeowner’s weekly payment rises from $715.65 to $736.32:

Payment comparison	Amount
Weekly payment before the increase	$715.65
Illustrative weekly payment after the increase	$736.32
Additional weekly expense	$20.67
Additional expense over 52 weekly payments	$1,074.84
Average additional monthly expense	$89.57

$736.32 − $715.65 = $20.67 more per week. Over 52 payments, that adds up to $1,074.84 in additional mortgage payments if the payment stays unchanged.

That is more than $1,000 a year that needs to come from the household budget. For a family already balancing groceries, utilities and other commitments, even a modest payment increase deserves a plan.

These figures illustrate the budget impact of a payment increase; they are not a lender quote or a calculation of today’s rate change on a specified mortgage. A previous payment decrease will not necessarily reverse by exactly the same amount. The actual adjustment depends on the outstanding balance, remaining amortization, mortgage terms and lender calculation. The additional payment is a cash-flow expense; it is not necessarily all additional interest.

Is now still a good time to purchase?

Yes—now can still be a good time to purchase when the home and the financing fit your circumstances.

If you’re buying your first home, explore condo opportunities for first-time home buyers and consider how mortgage payments and condo fees fit your budget

A rate increase is a reason to review the numbers. It does not, by itself, determine whether buying makes sense.

Before making an offer:

Set a comfortable payment limit. Include property taxes, utilities, insurance, maintenance and any condo fees.
Compare mortgage options. Consider payment stability, flexibility, prepayment privileges and potential penalties alongside the rate.
Check a higher-payment scenario. Understand what another increase could mean before committing.
Ask about a rate hold. Confirm its expiry date, conditions and whether a lower rate can be accessed before closing.
Keep a cash cushion. Closing costs and unexpected expenses need room in the plan.

For homeowners approaching renewal, an early review gives you time to compare options. For variable-rate borrowers, the first step is confirming how your own contract responds to prime-rate changes.

Mortgage terms in plain language

Policy rate: The Bank of Canada’s target overnight interest rate.
Basis point: One-hundredth of a percentage point; 25 basis points equals 0.25 percentage points.
Prime rate: A lender’s reference rate used to price many variable-rate products.
Fixed-rate mortgage: A mortgage with an interest rate set for its term.
Variable-rate mortgage: A mortgage whose interest rate can change during its term.
Amortization: The repayment period used to calculate mortgage payments.
Rate hold: A lender’s conditional commitment to a rate for a specified period.
Renewal: The arrangement of a new mortgage term when the current one ends.

Frequently asked questions

[FAQ] Did the Bank of Canada increase rates on October 28, 2026?

Yes. It raised its policy rate from 2.25% to 2.50%.

[FAQ] Was the last rate decrease in November 2025?

The announcement was October 29, 2025. Some borrowers may have seen their payment adjustment afterward.

[FAQ] Will everyone’s mortgage payment increase?

No. The effect depends on the mortgage type and contract. Existing fixed mortgage rates remain unchanged during their term.

[FAQ] Are more increases guaranteed?

No. The Bank has left that possibility open, and economists disagree about the path ahead.

[FAQ] Should I wait for lower rates before buying?

That decision should reflect your budget, housing needs and financial cushion. Lower future rates are not guaranteed.

Let’s look at what this means for you

Have questions about today’s announcement, your mortgage or your plans to buy? Reach out to me, Tracey Brock. Now can still be a good time to purchase, and I can help you understand your options and build a plan that fits your budget.

Editorial link intents for publication:

“Fixed versus variable mortgages” → a related educational article.
“Preparing for your mortgage renewal” → a renewal planning article.
“Understanding mortgage pre-approvals” → a purchase planning article.

Research note: Forecasts above were published before the October 28 decision. They are not presented as updated reactions to the announcement.

19 Feb

Down Payment Rules in Ontario: What Every Home Buyer Should Know

General

Posted by: Tracey Brock

Down Payment Rules in Ontario: What Every Home Buyer Should Know

If you are reviewing down payment rules in Ontario, clarity matters. Across the Greater Toronto Area, the same question appears repeatedly.

Is twenty percent required?

In most cases, it is not.

Under current federal guidelines, properties priced below $1.5 million may qualify with less than twenty percent down payment, subject to mortgage default insurance requirements. As a result, understanding the updated thresholds prevents unnecessary over-saving.

Let us break this down clearly.

How Down Payment Rules in Ontario Work

Currently, Canada uses a tiered minimum down payment system. This structure applies to all buyers, not only first-time purchasers.

Here is how the percentages apply:

Five percent on the first $500,000
Ten percent on the portion between $500,000 and $1,499,999
Twenty percent minimum at $1.5 million or more

The $1.5 Million Threshold in Ontario

Previously, insured mortgages were capped at $1.0 million. However, the federal limit increased to $1.5 million. Consequently, more properties in the GTA now qualify for insured financing.

To illustrate:

Purchase price: $900,000

Five percent of $500,000 equals $25,000.
Ten percent of $400,000 equals $40,000.

Total minimum down payment equals $65,000.

Now compare that with a $1,500,000 purchase.

Minimum down payment equals $300,000.

Clearly, the threshold creates a significant capital shift. Therefore, purchase price strategy directly affects required liquidity.

Real GTA Math Examples

Example 1: $800,000 purchase

5% of $500,000 = $25,000
10% of $300,000 = $30,000
Minimum down payment = $55,000

Example 2: $1,200,000 purchase

5% of $500,000 = $25,000
10% of $700,000 = $70,000
Minimum down payment = $95,000

This example is exactly why the $1.5M cap matters in the GTA. A buyer no longer needs $240,000 down simply because the price is above $1.0M.

Example 3: $1,499,999 purchase

5% of $500,000 = $25,000
10% of $999,999 = $99,999.90
Minimum down payment = $124,999.90

Example 4: $1,500,000 purchase

Minimum down payment = $300,000
Mortgage default insurance not available.

Buying With Less Than Twenty Percent

A down payment below twenty percent triggers mortgage default insurance. In this structure, the insurance premium is added to the mortgage balance.

Although insurance introduces additional cost, insured mortgages often receive competitive interest rates due to reduced lender exposure. Consequently, insured status should not be viewed negatively without analysis.

For a deeper structural comparison, see Insured vs Uninsured Mortgage in Ontario.

Aligning Down Payment With Qualification

Minimum capital represents only one component of approval. Qualification criteria remain separate.

Income stability, debt ratios, credit profile, stress test requirements all influence borrowing power.

Because of this, savings plans must align with qualification strength. Before transferring funds between accounts, review the Mortgage Pre-Approval Process in Ontario. to ensure timelines remain aligned.

For first-time buyers structuring registered accounts, see First Time Buyer Down Payment in Ontario for a strategic breakdown.

Common Misunderstandings

Many buyers assume twenty percent is mandatory.

Some believe the older $1.0 million cap still applies.

Others move funds too close to closing.

Each mistake creates friction.

Clarity prevents delay.

Final Thought

Down payment rules in Ontario follow a clear framework.

The insured threshold now reaches $1.5 million.

Knowing the tiers protects your capital strategy.

Clarity reduces stress. Structure builds control. Planning strengthens every offer.

Mortgage Strategy in Your Pocket

Planning does not stop after reading one article.

Download the app to:

• Calculate payments
• Test affordability scenarios
• Compare mortgage options
• Stay organized through approval
• Track your purchase or refinance in one place

Download the app here:
https://www.dlcapp.ca/app/tracey-brock?lang=en

Tracey Brock * 416.788.6207 * TBrock@DominionLending.ca * DLC Expert Financial 12129 * Independently o/o

19 Feb

Using your RRSP, FHSA, the Home Buyers’ Plan should be intentional — not reactive.

General

Posted by: Tracey Brock

If you’re trying to understand the first time buyer down payment in Ontario, you’re not alone — especially in the Greater Toronto Area where home prices make planning essential knowing the difference between FHSA vs RRSP for first-time home buyers in Ontario is a great place to start.

Between higher home prices, qualification rules, and rising living costs, most first-time buyers don’t have room for financial missteps. Yet we still see the same pattern: an offer gets accepted, then the questions start.

“How do we pull money from our RRSP?”
“Can we use the FHSA too?”
“Are there tax consequences?”

Your RRSP, FHSA, the Home Buyers’ Plan should be used intentionally — not reactively.

Because timing matters, it’s smart to structure this before you start house hunting.

If you’re already thinking about buying, you can start your mortgage application here and we’ll review your FHSA and RRSP strategy as part of the process:
https://velocity-client.newton.ca/en/client/journey/home?shortCode=kg2f5wh1spba

First Time Buyer Down Payment: Quick Ontario Overview

If you want the short version:

FHSA: Tax-deductible contributions, tax-free withdrawal for a qualifying first home, no repayment required.
RRSP (Home Buyers’ Plan): Tax-free withdrawal upfront, but repayment required over 15 years.
Typical Strategy: Use FHSA first. Layer in RRSP if needed.

Now let’s break it down properly.

Understanding the First Time Buyer Down Payment in Ontario

The FHSA (First Home Savings Account)

The FHSA gives you:

Tax-deductible contributions
Tax-free withdrawals for a qualifying first home
$8,000 annual contribution room
$40,000 lifetime maximum

The RRSP and the Home Buyers’ Plan (HBP)

The RRSP works differently. Specifically, it connects to the Home Buyers’ Plan.

Under the Home Buyers’ Plan:

You can withdraw up to $60,000 from your RRSP
The withdrawal is tax-free at the time
However, you must repay it over 15 years

If you miss a repayment, as a result, the missed amount becomes taxable income.

Therefore, while the RRSP can be helpful, that repayment obligation is exactly why planning ahead matters.

How the First Time Buyer Down Payment Works in the GTA

Let’s bring this into real numbers.

Example purchase: $850,000 condo in Toronto.

Minimum down payment required:

5% on first $500,000 = $25,000
10% on remaining $350,000 = $35,000

Total minimum down payment = $60,000

Understanding the minimum down payment structure is critical in Ontario. If you want a full breakdown of how the percentages work at different price points, read our guide on how much down payment first-time home buyers need in Ontario.

Now imagine you have:

$20,000 saved in your FHSA
$40,000 available in your RRSP

Strategic approach:

Withdraw $20,000 from FHSA (no repayment required)
Withdraw $40,000 under the HBP (structured repayment)

Depending on your down payment size, your mortgage may be classified differently. Here’s a breakdown of insured vs uninsured mortgages in Ontario and how that affects rates and qualification.

When structured properly, there’s no scrambling, no unexpected tax issues, and no last-minute financial stress.

Planning Your First Time Buyer Down Payment 12–24 Months Ahead

The strongest first-time buyers in the GTA don’t wait until an offer is accepted.

They plan 12–24 months in advance.

That means:

Opening FHSA accounts early
Timing RRSP contributions for tax efficiency
Reinvesting refunds intentionally
Aligning savings strategy with qualification strategy

Before you move money between accounts, it also helps to understand the mortgage pre-approval process in Ontario, so your savings strategy aligns with your qualification timeline.

Savings and qualification should work together — not separately.

Case Study: York Region First-Time Buyers

Mark and Sara live in Vaughan. Combined income: $150,000.

Instead of rushing, they planned 24 months ahead. As a result, their savings strategy was structured instead of rushed.

First, their FHSA contributions totaled $32,000.
Then, they reinvested the tax refunds.
In addition, they structured their RRSP contributions strategically.

FHSA Contributions

$32,000 combined over two years
$9,000–$10,000 in tax refunds

They reinvested the refunds.

RRSP Contributions

$50,000 total
Approximately $14,000 in additional refunds

By the time they purchased, their total down payment strength was over $105,000.

They bought confidently without borrowing from family and without draining emergency savings.

That’s what structured planning looks like in the GTA.

Common Mistakes We See in Ontario

Waiting until after an accepted offer
Overfunding RRSP while ignoring FHSA
Not planning HBP repayment
Missing contribution deadlines
Moving funds too close to closing

In a competitive market like the Greater Toronto Area, these mistakes can cost thousands — or delay a purchase altogether.

FAQs

Should I use FHSA or RRSP first as a first-time home buyer in Ontario?
In most cases, the FHSA should be maximized first because it does not require repayment.

Can I combine FHSA and RRSP for the same purchase?
Yes. Many GTA buyers use both together to reach their required down payment.

Do I repay FHSA withdrawals?
No. Qualified withdrawals are tax-free and do not require repayment.

What happens if I miss an HBP repayment?
The missed amount is added to your taxable income for that year.

How early should I plan this strategy?
Ideally 12–24 months before you intend to buy.

Final Thought

In the GTA, saving money isn’t enough.

Structuring it properly is what changes outcomes.

If you’re planning to buy within the next 6–24 months, let’s map out your FHSA and RRSP strategy before you make an offer.

Planning first. Offers second.

Take the strategy with you.
Download the app to calculate payments, review affordability, and stay aligned with your mortgage plan.

https://www.dlcapp.ca/app/tracey-brock?lang=en

First time buyer down payment in Ontario

Tracey Brock * 416.788.6207 * TBrock@DominionLending.ca * DLC Expert Financial 12129 * Independently o/o