At its October meeting, the Bank of Canada reduced its overnight rate by 25 basis points, bringing it to 2.25%. This decision reflects ongoing economic softness, easing inflation pressures, and global uncertainty.

Key Drivers Behind the Cut

• Slower domestic growth and consumer spending
• Softening labour market conditions
• Inflation trending toward the 2% target

Forward Guidance
The Bank stated that the current rate level is “appropriate,” suggesting a pause in further cuts. However, some analysts anticipate one more rate reduction in early 2026 if economic conditions remain weak.

Implications for the Housing Market

• Lower borrowing costs may support buyer activity, especially for variable-rate mortgage holders
• Fixed-rate products may adjust based on bond yields and market expectations
• Realtors should monitor rate trends and proactively guide clients through financing options

Advisory Note

With the Bank of Canada’s latest rate cut, conditions have shifted in favour of buyers who have been waiting for the right moment to enter the market. Lower borrowing costs may improve affordability and open up new opportunities that weren’t available just a few months ago. Now is a good time to reassess your position, review updated mortgage options, and explore what this change could mean for your purchasing power. If you’ve been on the sidelines, it may be worth a conversation about how today’s market could work to your advantage.

Suzie Han

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