On September 17, 2025, the Bank of Canada cut its policy interest rate by 0.25% to 2.50%, the lowest level in around three years. The move was in response to a weakening labor market, slowing economic growth, and easing inflation pressures.
What impact does this have if you’re a Buyer or Seller? Visit my blog page to find out HERE!
🏡 Impact for Buyers
- Lower borrowing costs: Variable-rate mortgages tend to track the BoC rate more closely, so buyers using variable or adjustable mortgages should see lower monthly payments. Even fixed rates may drift down as bond yields respond.
- Increased affordability: With reduced interest costs, some buyers who were previously priced out may find themselves able to qualify for a mortgage, or take on a slightly bigger house, or stretch their budget more comfortably.
- More activity: Buyers who were waiting on the sidelines might feel this interest rate cut is enough incentive to begin looking again.
📈 Impact for Sellers
- More competition for listings: As buyers’ buying power improves, there may be more interest in homes that are “move-in ready” or well-priced. Sellers who prepare their homes well could see stronger activity.
- Faster sales times in hot neighborhoods: In markets where supply is tight, this boost in buyer demand could shorten time on market for well-positioned homes
- Pricing sensitivity still very important: Even though financing is more approachable, high price tags or homes in less desirable condition or locations may lag unless sellers are realistic. Sellers can benefit if they understand how much buyers’ increased affordability actually buys in their market.
⚠️ Things to Watch Out For
- Fixed mortgage rates lag behind: Fixed-rate mortgages don’t always respond immediately or fully to BoC policy changes; bond market dynamics, lender risk spreads, and other factors matter.
- Economic uncertainty remains: The cut came because of concerns about slowing growth, weak labor markets, and trade issues. Buyers and sellers may act conservatively until these risks resolve.
- Potential for further rate changes: The Bank of Canada has signaled it’s data-driven; if inflation creeps back up or the economy shifts unexpectedly, rates could be adjusted again.
- House prices & supply still major factors: Even with cheaper borrowing, limited inventory or high housing prices in some areas may still make it hard for buyers, and sellers in less competitive markets may still struggle.
Need to know more? Please reach out to me to find out if now is the time to buy or sell a property for you at #250-423-1471
