The Bank of Canada is expected to make a bold move by cutting interest rates by half a percentage point this week. This decision follows a significant drop in the annual inflation rate, which fell to 1.6% in September—below the 2% target. Economists, like Nathan Janzen from RBC, believe the Bank of Canada will continue to lower rates to support economic growth, as current rates remain restrictive.
For homeowners and first-time homebuyers in cities like Vancouver, Surrey, Langley, and Burnaby, this rate cut could bring relief, especially for those looking to refinance or enter the market. However, while lower rates could make mortgages more affordable, challenges remain. House prices in the Vancouver area are still high, and unemployment has risen, making it harder for younger buyers to qualify despite favourable interest rates.
If you’re deciding between a fixed rate or variable rate, the Bank of Canada’s cuts may encourage more people to explore variable rates, as they could continue to fall. However, with rising unemployment and softening demand in the housing market, some experts warn that lower interest rates won’t necessarily lead to a big jump in real estate activity. Realtors and mortgage brokers in New Westminster and South Surrey can help navigate these uncertain times by comparing options for fixed vs. variable rates and offering advice on down payment requirements.
With further cuts likely by December, many are asking, “Will rates go down?” and “When will rates decrease?”—with some forecasts predicting the policy rate could reach 2.75% by mid-2025. If you’re considering buying a home or refinancing, now is the time to consult with a mortgage broker in the Greater Vancouver area, like myself, to explore your options.
