TL;DR
- Fixed mortgage rates are rising this fall, even though the Bank of Canada has held its rate at 2.25% for seven straight decisions.
- As of October 5, 2026, the best 5-year fixed rates are about 4.34% (insured) and 4.59% (uninsured), and the lowest 5-year variable is about 3.40%.
- On a $540,000 London home with 20% down, every 0.25% rise in rates adds about $61 a month to the mortgage payment.
- If you plan to buy in the next few months, get pre-approved with a rate hold now; most lenders hold your rate for 120 days.
Mortgage rates in London, Ontario are going up this fall, even though the Bank of Canada hasn't changed its rate since last October. As of October 5, 2026, the best 5-year fixed rate for a buyer with 20% down is about 4.59%, and every one of Canada's big banks has raised its fixed rates in the last few weeks. Here's what's driving it, what it costs on a typical London home, and what I'm telling buyers and homeowners to do about it.
Where Are Mortgage Rates Right Now?
Fixed rates have been climbing all fall, while variable rates are lower but tied to whatever the Bank of Canada does next. Mortgage rates in London are the same as everywhere else in Ontario, since they're set by national lenders.
| Rate | As of October 5, 2026 |
|---|---|
| Bank of Canada policy rate | 2.25% |
| Prime rate | 4.45% |
| Best 5-year fixed, insured (under 20% down) | 4.34% |
| Best 5-year fixed, uninsured (20% or more down) | 4.59% |
| Best 5-year variable | 3.40% (prime minus 1.05%) |
Sources: Bank of Canada and Ratehub.ca. These are the lowest advertised rates. The rate you're offered depends on your credit, down payment and the property, and rates can change daily.
Why Are Fixed Rates Rising When the Bank of Canada Hasn't Moved?
Fixed mortgage rates follow the 5-year Government of Canada bond yield, and the Bank of Canada's rate only moves variable mortgages. That's the part most people find confusing, and it explains this whole fall.
The 5-year bond yield climbed from about 2.6% in late February to over 3.7% at the end of September, according to Canadian Mortgage Trends. Investors expect inflation to stay higher for longer, and the Bank of Canada itself says inflation has been hovering around 3%, mostly because of gas prices. Lenders price fixed mortgages off that yield, so when it rises, fixed rates follow. On September 29, CIBC and TD raised select fixed rates by 0.20 percentage points, completing a sweep of increases across all six big banks (Yahoo Finance).
Variable rates are priced off prime, and prime only moves when the Bank of Canada moves. That's why variable rates haven't budged yet.
Will the Bank of Canada Raise Rates on October 28?
It's possible, and the experts don't agree. At its September 2 decision, the Bank said that "the upside risks to inflation have increased," which is central-bank language for "we're watching closely."
Scotiabank and National Bank have both forecast a hike to 2.50%, while RBC expects a hold (TechTimes). TD's Derek Burleton says the case for a hike is "not that compelling" (Canadian Mortgage Trends).
If the Bank does raise its rate, prime goes up the same day, and so do variable mortgages and lines of credit. Fixed rates have already risen ahead of any decision, so a hike on its own wouldn't necessarily move them much further.
How Much Does a Rate Increase Cost on a Typical London Home?
About $61 a month for every 0.25%. Here's the math on a home at London's September median price of $540,000 (from our September market update) with 20% down, which works out to a $432,000 mortgage on a 25-year amortization.
| 5-year fixed rate | Monthly payment | Compared with today |
|---|---|---|
| 4.59% (today's best uninsured) | $2,413 | None |
| 4.84% | $2,473 | +$61 |
| 5.09% | $2,535 | +$122 |
| 5.59% | $2,660 | +$247 |
A full point higher costs about $247 more a month, or close to $3,000 a year. Higher rates also shrink how much a lender will approve you for, which is the bigger issue for most buyers. You can run your own numbers in our mortgage calculator.
Will Rising Rates Push London Home Prices Down?
So far, rising rates are holding London prices flat, with the most pressure on condos. The median sale price was $540,000 in September 2026, about 6.6% lower than a year earlier, and London had roughly 5.5 months of inventory, which gives buyers time to shop and room to negotiate.
When rates climb, some buyers' budgets shrink, and they shift to lower price points or wait. That shows up first in the parts of the market with the most supply. Condos sat at about 6.5 months of inventory in September, with a quarter of active condo listings already reduced. Detached homes in tighter areas held up better. Oakridge, for example, had about 3.1 months of inventory. Our London price outlook goes deeper on where prices are likely headed.
Should You Wait, Lock In a Rate Hold, or Go Variable?
If you're planning to buy in the next few months, get pre-approved with a rate hold now. Most of the lenders my clients work with offer a 120-day rate hold with a pre-approval, and right now I'm encouraging every buyer I talk to to get one done.
A rate hold locks in today's rate for those 120 days while you shop. If rates keep rising, you keep the lower rate. If rates drop, many lenders will give you the lower one at closing, so ask yours how they handle it. For a buyer, it's one of the simplest ways to protect your budget in a market like this. Our pre-approval guide walks through the process.
Fixed or variable is the question I get asked most, and my answer is always the same: talk to a trusted mortgage advisor or broker, because it comes down to your risk tolerance. Variable rates are lower today, but your costs move with the Bank of Canada. A fixed rate costs more today, but your payment is set for the full term. Neither one is right for everybody, and a good advisor will walk you through both against your own budget.
As for waiting for rates to fall, that's hard to plan around right now. Bond markets are currently pricing in rate increases over the next year, according to Canadian Mortgage Trends. The buyers who do best are the ones who buy when they're financially ready, with a rate hold in place.
What If Your Mortgage Is Up for Renewal?
Expect a noticeably bigger payment. Most people renewing this year locked in a 5-year term back in 2021, when fixed rates were around 2%. Compared with where rates were five years ago, renewal payments are way up, and I'm hearing it from homeowners all the time.
The Bank of Canada estimated in July 2025 that people renewing a 5-year fixed mortgage in 2026 would see their payments rise by 20% on average, and fixed rates have climbed since then. Here's a simple example:
| Fall 2021 | Renewal, fall 2026 | |
|---|---|---|
| Rate | 2.00% | 4.59% |
| Mortgage balance | $400,000 | $335,081 |
| Years left to pay | 25 | 20 |
| Monthly payment | $1,694 | $2,128 |
That's $435 more a month, about 26% higher, even though the balance is smaller. If your renewal is coming up, start the conversation with your lender or a mortgage broker a few months early, compare offers instead of signing the first renewal letter, and ask what options you have if the new payment is tight.
If a higher renewal payment has you wondering whether your current home still fits, a complimentary home evaluation will tell you what it would realistically sell for in today's market. And if you have questions about any of this, buying, selling or renewing, reach out to me. I'm always happy to talk it through.
Frequently Asked Questions
What are mortgage rates in London, Ontario right now?
As of October 5, 2026, the best advertised 5-year fixed rates in Ontario were about 4.34% for insured mortgages (under 20% down) and 4.59% for uninsured mortgages (20% or more down). The lowest 5-year variable rate was about 3.40%, and the prime rate was 4.45%. London rates are the same as the rest of Ontario because they're set by national lenders, and they can change daily.
Why are fixed mortgage rates going up if the Bank of Canada has not raised rates?
Fixed mortgage rates follow the 5-year Government of Canada bond yield. That yield rose from about 2.6% in late February 2026 to over 3.7% by the end of September as investors priced in higher inflation, and lenders raised their fixed rates in response. The Bank of Canada's rate mainly affects variable mortgages and lines of credit through the prime rate.
How much does a 0.25% rate increase add to a mortgage payment?
About $14 a month per $100,000 borrowed on a 25-year amortization at today's rates. On a $432,000 mortgage, which is 20% down on London's September 2026 median price of $540,000, a 0.25% increase adds about $61 a month, and a full 1% increase adds about $247 a month.
How long does a mortgage rate hold last?
Most lenders offer a rate hold of 90 to 120 days with a mortgage pre-approval, and many of the lenders London buyers use offer 120 days. A rate hold locks in today's rate while you shop for a home, so you're protected if rates rise before you buy.
Should I choose a fixed or variable mortgage right now?
It depends on your risk tolerance. A variable rate is lower today but moves with the Bank of Canada, so your costs can go up if it raises rates. A fixed rate costs more today but keeps your payment the same for the whole term. The best way to decide is to talk to a trusted mortgage advisor or broker who can compare both against your budget.
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Justin Skrypnyk
Real Estate Broker | Sutton Group Chapman Realty Inc., Brokerage | Oakridge, London Ontario
Justin Skrypnyk is a Real Estate Broker serving Oakridge and West London. He writes regularly about the London Ontario market to help buyers and sellers make well-informed decisions.