The short answer: The Bank of Canada controls one rate, but your fixed mortgage follows a different one. That's why fixed rates can climb even on a day when the Bank of Canada does absolutely nothing.
Think of it like this. The Bank of Canada has a "key rate" — imagine it as the temperature setting on a thermostat for the whole economy. Right now it's set at 2.25%, where it has stayed since October 2025. The Bank looks at it 8 times a year, and its next check-up is October 28, 2026. When the thermostat doesn't move, variable-rate mortgages barely move either: today, Canada's big-bank prime rate is 4.45%.
Fixed-rate mortgages are a different story. When you take a 5-year fixed mortgage, the lender is lending you money for 5 full years. To do that, they get their money from investors — and the price of that money goes up and down every single day. That daily price is called the "bond yield." You can think of it like the wholesale price of groceries: your home grocery bill doesn't change, but the store's cost changes behind the scenes.
In late September, that wholesale price hit its highest point in a full year (about 3.73%). So Canada's big banks raised their fixed rates — even though the Bank of Canada hadn't moved. On October 7, the lowest 5-year fixed rate in the country was around 4.59%, while the lowest 5-year variable was around 3.45% (source: nesto.ca, October 7, 2026).
What does this mean if you're buying in London, Ontario?
1. Waiting for the Bank of Canada to cut rates may not lower your fixed rate. Your fixed rate is set on the day you sign, and it can rise on bond-market news even when the Bank of Canada holds. In August 2026, the average home price in London was $553,500, down 3.52% from a year ago (LSTAR data, via nesto.ca) — prices give buyers breathing room, but fixed rates are the part you want to watch.
2. "Fixed" means it can't change after you sign. Whatever rate you lock in stays the same for 5 years, no matter what the Bank of Canada does later. For many first-time buyers, that peace of mind is worth more than chasing the perfect rate.
3. Get pre-approved early and compare both options. A pre-approval tells you exactly what you can afford, and we can walk through whether fixed or variable fits your situation better.
If you're thinking about buying in London, Ontario, talk to us first. We'll explain every number in plain words — no jargon, no pressure.
— Paola Cano & Jose Ramirez, Thrive Realty Group Inc., Brokerage, London, Ontario.