On October 28, 2026, the Bank of Canada raised its policy rate by a quarter point to 2.50% — its first increase since July 2023 — after September inflation came in at 3.1%, driven by gasoline prices up 27.8% year over year. If you hold a variable mortgage with fixed payments, that hike moved your trigger rate closer: the trigger rate is the rate at which your fixed payment covers interest only and stops paying down principal. This week is the right time to find yours, before a lender letter finds it for you.

Two kinds of variable mortgage

With an adjustable-rate variable mortgage, the payment moves when the rate moves: you pay more interest and roughly the same principal, automatically. With a fixed-payment variable mortgage, the payment does not move. Instead, the mix inside the payment changes — as rates rise, more of each payment goes to interest and less to principal, and your amortization stretches out on paper.

That second design is where the trigger rate lives.

What the trigger rate and trigger point are

The trigger rate is the interest rate at which your fixed payment covers interest only — none of it is paying down principal. Your lender calculates it for your specific mortgage, based on your balance, payment, and original amortization, so it is different for every borrower.

The related trigger point is usually expressed as a balance threshold: if, because interest is being added rather than paid, your balance grows to a set percentage of the original amount or the property value (the exact threshold is set in your mortgage terms), the lender can require action even before renewal.

Photo via Wikimedia Commons

What a lender can require when you get there

Your mortgage contract governs the details, and lenders differ, but the standard menu is some combination of: increasing your payment enough to cover interest and resume principal repayment, making a lump-sum prepayment to bring the balance down, or converting to a fixed rate or a new term. What you should not do is ignore the letter — the options are better when you choose one than when the deadline in the letter chooses for you.

Why this matters more after October 28

The Bank said inflation is likely to stay around 3% through most of 2027 and does not expect it back near the 2% target until around mid-2028, with the next decision on December 9, 2026. That does not guarantee another hike — the Bank is deciding meeting by meeting — but it does mean variable borrowers should plan for the possibility that rates stay higher, or move up again, rather than assuming relief is coming soon. Fixed-payment variable mortgages are often sold on payment stability, and for borrowers with cash-flow room that stability is real — until the trigger converts a slow drift into a required payment jump all at once.

Things you can do before you are close

• Make modest payment increases early, while they are voluntary and small.
• Use prepayment privileges in good months to keep the balance — and the trigger distance — moving the right way.
• Watch your annual statement’s amortization figure; if it is stretching well beyond the original schedule, that is your early warning.
• Ask your lender, in writing: What is my trigger rate? What is my trigger point? If I reach it, what exactly can you require, and how much notice do I get?
• If a conversion or early renewal is on the table, compare its full cost against riding out the variable, rather than deciding from the trigger letter alone.

A note on rates

Posted rates are a starting point, not the final word. Rates are sometimes negotiable depending on the person and the situation, and we work with multiple lenders who offer different products and sometimes more competitive rates than any single posted table shows. Contact us and we will shop across lenders for your file — call Travis Bannert at 780-720-8240. Any rate quoted for your file is based on an application and lender approval — it is confirmed only when a lender reviews your full application.

Start with a check, not a guess

If you hold a fixed-payment variable mortgage and do not know your trigger rate, run your numbers through the Pre-Approval & Refinance Check — that page is the fastest way to sign up for a review of what you qualify for, what documents you need, and what your payment would look like on the homes you are actually watching in Edmonton and across Alberta.

Frequently asked questions

What is a mortgage trigger rate?
It is the interest rate at which a fixed-payment variable mortgage payment covers interest only, so none of the payment reduces the principal. Your lender calculates it from your own balance, payment and amortization, so it differs for every borrower.

Did the October 28, 2026 rate hike change my fixed-rate mortgage?
No. A fixed-rate mortgage already in place does not change during its term. The hike affects variable-rate payments and prime-linked borrowing right away, and it matters for fixed borrowers at renewal, because fixed pricing follows bond yields.

What happens if I reach my trigger point?
Your lender can require you to increase your payment, make a lump-sum prepayment, or convert to a fixed rate or new term — the exact options and notice are in your mortgage contract. Acting before you reach it keeps those choices voluntary and usually cheaper.

When is the next Bank of Canada decision?
December 9, 2026. The Bank raised the policy rate to 2.50% on October 28, 2026 and said it will decide meeting by meeting, with inflation expected to stay around 3% through most of 2027.

Thinking about this move in Edmonton or anywhere in Alberta? Call Travis Bannert at 780-720-8240 — I will try to call you this week, or reply with a good time and we will set a phone appointment to walk through your file step by step.

By Travis Bannert, Realtor and Mortgage Broker
Travis Bannert, Mortgage Broker | Next Door Mortgages, BFL Dominion Lending Centres | 780-720-8240 | nextdoormortgages.com