bips EOW Mortgage Report, Week 42 (2026)

bips EOW is our end-of-week report on Canadian mortgage news. This edition covers October 9 to October 16, 2026 and was published October 17, 2026. Every item carries the date we read it and a source link. Some trade outlets run a few days behind the underlying event, so where a report came out earlier we say so in the text. Read it on Substack.

Fixed rates rose again this week while jobs and home sales weakened. Banks are still raising rates even though the 5-year yield has eased from its Sept 28 peak, and renewals are where brokers will feel it first. OSFI now monitors lenders' 4.5x loan-to-income limit every quarter, and Mortgage Professionals Canada is pressing Ottawa for a CRA income verification tool. The Bank of Canada decides on Oct 28, and some forecasters now expect a hike.

This week in one minute

• Fixed rates keep climbing. RBC, BMO and CIBC all raised rates this week, and all Big Six banks have raised some fixed rates since early September. The Bank of Canada is at 2.25% and decides next on Oct 28.
• Jobs weakened. Canada lost 68,000 jobs in September. Unemployment is 6.5%.
• Housing is cooling. CREA says September sales fell 2.3% from August and cut its 2026 forecast for the third time.
• Regulators are leaning on repayment capacity. OSFI now monitors its 4.5x loan-to-income limit every quarter, and Guideline E-23 on model risk, including AI, takes effect May 1, 2027.
• Fraud is falling but getting harder to see. Equifax puts Q2 mortgage application fraud at 0.20% and warns AI-forged documents are a growing problem.
• Renewals are the pressure point. Banks are reaching renewing clients earlier, and the share of brokers naming past clients as their top referral source fell from 56% to 45%.

Key numbers

Rates

Canada loses 68,000 jobs in September

We saw this in CMT's Oct 12 digest of Statistics Canada's Oct 9 jobs report. It was the second straight monthly decline, after 42,000 in August. Unemployment rose to 6.5% from 6.4% (7.1% a year ago). The public sector lost 70,000 jobs, youth employment fell 48,000, and participation dropped to 64.8%, the lowest since 1997 outside 2020. Employment is still up 95,000 from a year ago. Data on our unemployment rate page. Source: The Hub, Statistics Canada, Sept 2025.

RBC, BMO and CIBC raise advertised fixed rates

CMT's Oct 12 digest recapped the week's moves, which happened a few days earlier. RBC raised fixed rates 10 to 20 bps on Oct 6. BMO took its standard 5-year to 5.14% on Oct 7. CIBC added 15 to 20 bps on Oct 9, the same day the jobs report pulled the 5-year yield down. These are advertised rates, not broker-channel offers. Since early September all six big banks have raised some fixed rates, by roughly 10 to 50 bps across 2 to 5 year terms.

Also in the week's reading, from an MPA piece that ran Oct 9: National Bank says terms of five years or longer were 8.8% of new mortgages in July, the lowest share since its series began in 2013. Short fixed terms gained in 2023 and 2024, then lost ground to variable in 2025 and 2026. Source: CMT, MPA, MPA, National Bank.

IMF warns sovereign bond yields could spike

The IMF's Global Financial Stability Report calls a sharp rise in yields "among the most plausible near-term threats to global financial stability," pointing to heavy government debt, AI-related bond issuance, and leveraged hedge funds. In Canada the 5-year yield rose from 3.35% on Sept 1 to 3.60%, topped 3.7% on Sept 28, closed at 3.599% on Oct 8 and traded near 3.56% after the jobs report. The 10-year hit 3.9% in September. Follow it on our bond yields page. Source: MPA, Wealth Professional.

Global bond selloff may mean fewer rate hikes

Higher yields tighten conditions on their own, so central banks may need fewer hikes. The average global government bond yield is above 4%, the highest since 2000, and hike bets across eight major economies fell by almost 200 bps since mid-September, with Canada among the larger pullbacks. Source: Bloomberg via CMT.

US inflation heats up

US prices rose 0.6% in September and 3.7% from a year earlier; core was 0.3% and 2.6%. The Fed raised rates in September for the first time since 2023, and investors put about 50% odds on an October hike. Source: Bloomberg via CMT.

Bank of Canada: hold through 2026, or a hike in October?

The overnight rate has been 2.25% for about a year, with decisions on Oct 28 and Dec 9. Royal LePage's Phil Soper expects a hold through 2026 and a hike in early 2027, though more forecasters now call for October. WealthOne Bank's Grant Armstrong: "I think rates will probably go up in October." Dominion Lending Centres' Sherry Cooper expects a hike by late 2026 or early 2027. In a Nanos poll, 54% of Canadians expect higher inflation next year, against 7% who expect lower. Source: MPA, CMT.

High bond yields reach commercial mortgages

CMHC-insured commercial loans price 55 to 100 bps over the 5-year GoC yield, conventional multifamily 130 to 200 bps, and office 150 to 250 bps. Avison Young says rising yields are reducing borrowing capacity and underwriting is getting more conservative. RBC economist Carrie Freestone: "Bond markets are essentially doing some of the Bank of Canada's job for them." Source: MPA.

Housing

CREA: September sales fall and the 2026 forecast is cut again

Sales fell 2.3% from August and 7.7% from September 2025. The average price was $666,538 (down 1.6% y/y) and the home price index fell 3.4% y/y. CREA cut its 2026 forecast to 444,530 sales (down 5.2%), blaming higher fixed rates and expected BoC hikes. Source: CBC, CP24.

Royal LePage: trade tensions stall the fall market

The Q3 national price was $810,000, down 0.8% y/y, and the Q4 forecast was cut to +1.0% from +2.0%. Toronto fell 3.7%, Vancouver 4.0%, and Montreal rose 2.9%. 38% of mortgage holders expect higher payments at renewal. Source: MPA.

BC sales fall 9% in September

BCREA reported about 5,250 sales, 9% below last September and 26% below the 10-year average. The average price fell 2.4% to about $924,000. Source: CMT.

Quebec home sales slide as listings build

Q3 sales fell 7% to 20,935, the fourth straight quarterly decline, while active listings rose 20%. The median single-family price was $500,000, up 2%. Source: MPA.

Asking rents fall for 24 straight months

The average asking rent was $2,034 in September, down 4.2% y/y. Source: MPA.

CMHC: September starts rise 3%, but year to date is down

Starts ran at an annual rate of 248,896, up 3% from August. January to September starts are down 4% from a year ago. CMHC's deputy chief economist Aled ab Iorwerth: "a key risk for Canada now is not building enough during this period of softening housing markets across the country."

Source: CMHC.

Regulation and risk

OSFI Annual Report: loan-to-income monitoring and E-23

OSFI says it implemented quarterly monitoring of newly originated uninsured mortgages above 4.5x loan-to-income at each lender. It assessed B-20 with a focus on renewals and refinancing risk and increased its challenge on repayment capacity. The B-20 text has not changed. Our read: expect lenders to be pickier and slower on exceptions.

In April 2026 OSFI revised its 2026-27 risk outlook to focus on real estate secured lending, non-bank financial intermediation, and funding and liquidity. The report also covers a credit risk consultation aimed at private credit and non-bank exposures, a streamlined approvals path intended for June 2026 for credit unions and fintechs, and a June 2026 cut to the Domestic Stability Buffer, which had been 3.5%.

Guideline E-23 on model risk takes effect May 1, 2027 and covers all models, applied in proportion to risk, so AI and machine learning are included. Our reading: that includes AI in underwriting, fraud detection or document review. Source: OSFI Annual Report, loan-to-income limits, E-23 letter.

OSFI endorses the FSB's sound practices for AI

OSFI endorsed the Financial Stability Board's 12 non-binding AI practices, four on governance and eight on lifecycle risk, and says they complement its existing guidelines, including E-23. The statement does not name underwriting, fraud detection or document review. Source: OSFI, FSB.

MPC urges a CRA income verification tool

CMT's Oct 13 story covered testimony from Oct 8. Mortgage Professionals Canada told the House finance committee, during its study of Bill C-31, that lenders should be able to check income directly with the CRA, with borrower consent. In May the CRA said it still needs funding and legal authority, then 12 to 18 months for initial steps. C-31 would raise the aggregate protected loan limit from $300 billion to $500 billion, and MPC backed letting private insurers cover properties with up to eight units, up from four. The bill passed second reading June 3 and is not law yet.

Our read: a CRA income check would close the gap AI-forged documents are opening. Source: CMT, Parliament.

Equifax: mortgage fraud eases to 0.20%, but AI is making it harder to spot

Equifax's Q2 numbers came out earlier (CMT first covered them Oct 2), and this week's story put them in context. The mortgage application fraud rate fell to 0.20% nationally. Ontario is highest at 0.28% (down from 0.40%), then Alberta at 0.19% and Quebec at 0.18%. Equifax Canada's Carl Davies, head of fraud and identity, says 80 to 90% of mortgage fraud is first-party, meaning applicants misrepresenting their own information. He suspects it is underreported and says AI makes forged income and employment documents easy to produce. His advice for brokers: screen suspicious files before submitting them, use fraud detection tools, challenge files that look off, and share information across lenders and brokers. Source: CMT, CMT, Q2 rates.

Mortgage brokering

Several stories point at the same thing: keeping clients through renewal, valuing your book, and getting clients to come back.

Brokers are losing past clients between renewals

In a survey of 459 brokers, 44.7% named past clients as their top referral source, down from 56.3% a year ago, while realtor referrals rose to 34.9%. At MortgageFest, speakers said banks are reaching renewing clients earlier. The story also leans on CMHC's May 2026 consumer survey: 39% of mortgage holders worry about payments, down from 53% in 2025, and 35% of renewers reported more pressure from rate changes, with payments up an average of $375 a month. See renewal volumes on our market data page. Source: MPA, CMHC.

RBC poll: 82% of upcoming renewers worry about rates

In the RBC/Leger poll of 1,810 Canadians (Aug 5 to 24), 82% of homeowners renewing within two years worry about rate increases, 51% say renewal is almost as stressful as buying their first home, and 60% expect it to strain their finances. In Quebec, 56% worry about rate increases and 38% expect a strain. Source: CMT, CMT, Quebec.

Ownwell: a broker's book is worth only what its engagement proves (sponsored)

In a sponsored post, Ownwell CEO Dan MacDonald argues a bare contact list is "nearly free" and only an engaged book has sale value. Ownwell says it reaches 55,000 homeowners and 52% of openers took action. It gives no valuation figures. Source: CMT.

Centum: client retention after closing (sponsored)

In a sponsored post, Centum president Adrian Schulz cites CMHC (65% of recent borrowers were renewers) and MPC (44% accepted their lender's first renewal offer). It promotes Mortgage Monitor, a Charlwood Pacific Group product, plus his book and the HomeHub referral tool. Source: CMT.

What it means for brokers

This section is our read, not reported fact.

• Contact renewals earlier. Banks are reaching renewing clients sooner and fixed rates are still rising. Reach out 120 or more days before maturity with a variable-versus-fixed comparison.
• Plan for a hike. CREA says one is widely expected before year-end, and some forecasters call for October.
• Expect slower exceptions on high-leverage files. Submit clean files and have a second lender ready.
• Screen income documents harder. AI makes forgeries better. Verify before submission.

Quick answers

What happened to Canadian mortgage rates in the week of October 12, 2026? Banks kept raising fixed rates, and the Bank of Canada held at 2.25% with its next decision on Oct 28, 2026.

How many jobs did Canada lose in September 2026? 68,000, after 42,000 in August, and unemployment rose to 6.5%.

How much did Canadian home sales fall in September 2026? 2.3% from August and 7.7% from September 2025, per CREA on Oct 16, 2026.

When does OSFI Guideline E-23 take effect? May 1, 2027, covering all models at federally regulated financial institutions, including AI.

Next week (W43)

• Bank of Canada decision, October 28. Hold at 2.25% or the first hike.
• StatsCan September CPI. The main input to the BoC decision.
• BoC Business Outlook Survey. Whether businesses expect weaker hiring and demand.
• Bond yields and bank rate moves. Does the 5-year revisit the 3.7% it topped on Sept 28?
• CRA income verification tool and Bill C-31. Any committee or funding news.

Next week's EOW covers October 17 to October 23 and publishes Saturday, October 24 at 12 pm ET.