Recent developments have led to significant changes in the trade landscape that may impact the Canadian economy and mortgage rates. On February 1, 2025, U.S. President Donald Trump announced the imposition of a 25% tariff on imports from Canada, with a 10% tariff specifically on Canadian energy resources. However, after discussions with Canadian Prime Minister Justin Trudeau, a 30-day pause on these tariffs has been agreed upon to allow for further negotiations.
Potential Economic Impact
The temporary suspension of tariffs provides a brief respite, but the situation remains fluid. If the tariffs are eventually implemented, they could lead to increased costs for Canadian exporters, potential job losses, and higher consumer prices. The uncertainty surrounding these trade policies may also affect business investments and economic growth.
Implications for Mortgage Rates
The evolving trade situation could influence both fixed and variable mortgage rates:
- Fixed Mortgage Rates: These rates are influenced by government bond yields. Economic uncertainty often leads investors to seek the safety of bonds, potentially lowering yields and, subsequently, fixed mortgage rates. truenorthmortgage.ca
- Variable Mortgage Rates: These rates are tied to the Bank of Canada’s overnight rate. In response to economic challenges, there is reasonable expectations that Prime may decrease further in 2025. However the exact timing and magnitude of such change remain uncertain and will be influenced by evolving economic conditions rates.ca
What This Means for You – Let’s Talk!
With these changes on the horizon, it’s more important than ever to have a solid mortgage strategy in place. Here’s how I can help:
- Understand Your Options – I’ll break down how fixed and variable rates may shift and what that means for your mortgage.
- Plan for the Future – Whether you’re renewing, refinancing, or buying, I’ll help you navigate the best options for your situation.
- Avoid Costly Surprises – Proactive planning can help you stay ahead of any rate changes and ensure financial stability.
Let’s chat about how these economic shifts impact your mortgage. Book a time with me at www.chatwithlisareynolds.ca, and we’ll go over your best course of action.
