The Bank of Canada just lowered its key interest rate by 0.25%, bringing the policy rate to 2.25%. This move reflects ongoing economic softness and easing inflation, and it directly impacts anyone with a mortgage or planning to get one.

The prime rate, the rate that variable rate mortgages are based on, sits at 2.2% above the policy rate, so effectively, prime has just dropped from 4.7% to 4.45%.  For homeowners with a variable-rate mortgage whose payments change with the prime rate, this will mean slightly lower payments in the months ahead. For those looking to buy or refinance, it opens a valuable opportunity. Lower rates improve affordability and boost borrowing power, giving buyers more breathing room with their budgets.

But here’s the key: when rates drop, the market often follows with a surge in buyer activity. More people re-enter, more offers go in, and competition increases, especially in well-priced segments. Acting now, before the crowd returns, can put you in a stronger position to negotiate and secure the right property.

While the Bank has signaled caution due to global uncertainty and structural shifts in the economy, they also indicate that inflation is expected to stay near target, and future rate moves will be based on evolving data. That means more cuts could come, but so could more demand.

If you’ve been waiting on the sidelines, this is your nudge to reassess. Whether it’s running numbers, getting pre-approved, or planning your next move, now is a smart time to take action while conditions are still in your favour.

Let’s talk about how this rate change affects your unique situation, and how to move forward with confidence.  My number is above and I’m always happy to help.