Interest Rates Are Rising Again. Should Calgary Homebuyers and Sellers Be Worried?

October 28, 2026 | Calgary Real Estate Market Update

Just when Canadians were getting comfortable with stable interest rates, the Bank of Canada has changed direction.

Today, October 28, the Bank of Canada announced a 0.25 percentage point increase to its benchmark interest rate, bringing it from 2.25% to 2.50%.

It's the first increase in more than three years, and naturally, it's raising questions about what happens next for the Calgary housing market.

Will buyers put their plans on hold? Will sellers need to reduce their prices? And could higher interest rates actually create opportunities for some homebuyers?

The answer isn't as straightforward as you might think.

First, Why Did the Bank of Canada Raise Rates?

The Bank of Canada isn't trying to slow down the housing market specifically. Its primary concern is inflation.

Rising energy costs have been pushing up the price of goods and services across Canada. The Bank is concerned that these increases could spread more broadly throughout the economy.

By increasing interest rates, the Bank hopes to keep inflation under control.

But here's the important part: higher interest rates affect more than just mortgage payments. They also influence consumer confidence, borrowing decisions and ultimately the real estate market.

What Does a 0.25% Increase Actually Cost?

A quarter of a percentage point might not sound significant, but it can make a difference to household budgets.

For example, let's look at a homeowner with a $400,000 mortgage.

Assuming a 25-year amortization and an illustrative mortgage rate increasing from 4.00% to 4.25%:

Mortgage	Before	After
$400,000	$2,104/month	$2,167/month

That's approximately $63 more per month, or $756 per year.

This example assumes a mortgage payment is recalculated at the higher rate. Actual changes depend on your lender and mortgage terms.

For buyers already stretching their budgets, even relatively small increases can affect affordability.

Could Higher Interest Rates Actually Benefit Some Calgary Buyers?

Here's where things get interesting.

Higher interest rates are generally viewed as bad news for homebuyers. But in a slower real estate market, the picture can be more complicated.

When borrowing costs rise, some buyers decide to wait. Others lower their maximum purchase price.

That can mean:

• Fewer competing offers on certain properties.

• More time to carefully evaluate a home.

• Greater negotiating opportunities with motivated sellers.

• Potential flexibility on price, possession dates or conditions.

Of course, these opportunities depend on the property type, location and available inventory.

A buyer who can comfortably afford their mortgage may find that less competition creates an opportunity that wouldn't exist in a busier market.

The key is to focus on the total cost of buying, not just the interest rate.

A lower purchase price doesn't automatically offset higher borrowing costs, but it's worth running the numbers.

What Does This Mean for Calgary Home Sellers?

For sellers, today's announcement reinforces something we've already been seeing in parts of Calgary's real estate market: buyers are becoming more selective.

When affordability is under pressure, buyers pay closer attention to value.

Properties that are priced appropriately and presented well can still attract interest. However, homes that are priced above comparable properties may struggle to generate showings or offers.

This is particularly important in market segments where buyers already have plenty of choices.

If you're thinking about selling, there are three things I'd focus on:

1. Price for today's market, not yesterday's.

What a neighbour sold for six months ago may not reflect current buyer expectations. Recent comparable sales, active competition and inventory levels matter.

2. Make your property stand out.

Professional photography, thoughtful presentation, accurate property information and strong online marketing can help buyers recognize the value of your home.

3. Understand your competition.

Buyers aren't just evaluating your property. They're comparing it against every other suitable home within their budget.

And remember, if you're selling one property to purchase another, a softer market may create opportunities on both sides of your move.

Will Calgary Home Prices Fall?

This is probably the question everyone wants answered.

But a single interest rate increase doesn't automatically translate into falling home prices.

Calgary's real estate market is influenced by several factors, including:

• The number of homes available for sale.

• Employment and economic conditions.

• Population growth and migration.

• Buyer confidence and mortgage affordability.

• The balance between supply and demand in individual neighbourhoods.

A detached home in West Calgary may experience very different market conditions from an apartment condominium in the inner city.

That's why I always encourage buyers and sellers to look at the specific neighbourhood and property type rather than relying solely on citywide averages.

There isn't just one Calgary real estate market. There are many smaller markets operating within it.

Should You Wait Until Interest Rates Come Down?

Waiting can seem like the safest option, but there's no guarantee that rates will fall in the near future.

In fact, the Bank of Canada has indicated that further increases may be necessary if inflation pressures continue.

For buyers, the more useful questions might be:

Can I comfortably afford the monthly payments? Am I planning to stay in the property long enough for the purchase to make sense? Does the home meet my needs? And am I buying at a reasonable price compared with today's market?

For sellers, the decision is equally personal.

If you're downsizing, relocating or moving to a different type of property, the cost of waiting needs to be considered alongside the potential benefits.

My Perspective on Calgary's Changing Market

Having worked in Calgary real estate and with local developers for many years, I've seen how quickly market conditions and buyer expectations can change.

One thing remains consistent: successful real estate decisions come from understanding the market rather than trying to predict it perfectly.

Higher interest rates may present challenges, but they don't mean buyers should stop buying or sellers should stop selling.

They simply make pricing, preparation, negotiation and financial planning more important than ever.

And in a changing market, having the right strategy can make a meaningful difference.

Thinking About Buying or Selling in Calgary?

Whether you're considering purchasing your first home, moving to a larger property, downsizing or selling an investment property, I'm happy to help you understand what today's market means for your plans.

As a Calgary Realtor® with 2% Realty, I provide full professional real estate services, local market knowledge and experienced negotiation support.

For sellers, my 2% commission approach also means keeping more of your hard-earned equity.

Adrienne McGarvey | 2% Realty Calgary

Accredited Buyer Representative (ABR) | Real Estate Negotiation Expert (RENE) | Certified Condominium Specialist (CCS)

www.adriennemcgarvey.ca

Every real estate decision is different. Mortgage affordability and financing should be reviewed with a qualified mortgage professional.