The Bank of Canada raised its policy rate by a quarter point on October 28, 2026, from 2.25% to 2.5%. It expects inflation to reach about 3.5% by the end of the year and to average 3% in 2027. It also said the rate could need to rise further. The next decision is December 9. Bank of Canada
If you already have a fixed-rate car loan, nothing changes. The rate you signed stays for the term. A variable-rate loan or a line of credit priced off prime is different: it moves when your lender moves prime.
For a new purchase, the policy rate doesn't set your APR. Banks and credit unions price their own loans. Honda's advertised finance and lease rates come from Honda Canada's monthly programs through Honda Financial Services, and those change month to month on their own schedule. The part I'd pay attention to is the Bank's warning. When a central bank says it may go higher, it's telling borrowers the cheap end of this cycle is behind them.
My prediction: the Bank of Canada's policy rate will still be 2.5% or higher on January 31, 2027. The Bank just forecast inflation near 3.5% at year-end and said it may need to raise again. Cutting within three months would go against its own forecast. I'm wrong if the policy rate is below 2.5% on January 31, 2027.
If you're buying right now: if you're financing in the next couple of months, get a written approval now and ask how long the rate is held. Then compare it with Honda's program rate on the exact model and term on this month's Honda deals. Paying cash or close to it? A rate hike is a reason to shop the price harder, not to rush.
Quick answers
Does the Bank of Canada rate hike raise my car loan payment?
Not if your loan has a fixed rate. The rate you signed stays for the whole term. A variable-rate loan or a line of credit tied to prime can go up when your lender raises its prime rate. New loans are priced by each lender.
Did the Bank of Canada raise interest rates in October 2026?
Yes. On October 28, 2026 the Bank of Canada raised its policy rate by a quarter point, from 2.25% to 2.5%. It said the rate could need to rise further. Its next decision is December 9, 2026.
Do Honda finance rates go up when the Bank of Canada raises rates?
Not automatically. Honda's advertised finance and lease rates are set in Honda Canada's monthly programs through Honda Financial Services. They can change from month to month, so check the current program for the exact model and term.
Want a rate you can hold?
Tell me the model, your trade and how you want to pay. I'll get you a written number on the current program before it changes.
Ask Henry a question
Get a straight answer on inventory, pricing, lease vs buy, or trade value. I reply myself.