As we step into 2025, I wanted to provide you with an update on the current state of fixed and variable mortgage rates, along with some predictions for the years ahead. Whether you’re considering a new mortgage, refinancing, or simply staying informed, this information will help you make better financial decisions.
Current Mortgage Rate Landscape Fixed mortgage rates have remained relatively stable at the start of 2025, hovering in the range of 4.19% to 5.04%. These rates reflect ongoing efforts by central banks to manage inflation, as economic conditions gradually stabilize. Meanwhile, variable rates have shown slight fluctuations due to changes in the Bank of Canada’s overnight rate, currently at 5.45%
Factors Impacting Rates
- Inflation: While inflation has moderated compared to previous years, central banks remain cautious, aiming to maintain economic stability.
- Economic Growth: Economic recovery continues at a measured pace, with housing demand and employment rates influencing mortgage trends.
- Global Markets: International events, including shifts in oil prices and geopolitical developments, play a role in shaping interest rate policies.
Predictions for 2025 to 2028
- Fixed Rates: Fixed rates are expected to decrease gradually (with some ups and downs) over the next two to three years as inflation pressures ease and the economy stabilizes. By 2028, rates could potentially return to the 4.0% to 5.0% range, depending on economic performance.
- Variable Rates: Variable rates are likely to remain stable in the short term, with a potential downward trend starting in mid 2025 as the Bank of Canada adjusts its monetary policy. Borrowers with variable-rate mortgages may see some relief in the coming years.
What This Means for You If you have a fixed-rate mortgage, now might be a good time to explore early renewal options to lock in more favorable terms. For those with variable rates, keeping an eye on market conditions and planning for potential rate changes is crucial.
Let’s Discuss Your Options Every situation is unique, and I’m here to help you navigate these changes. Whether you’re looking to refinance, renew your mortgage, or purchase a new property, let’s discuss how you can make the most of the current market.
Feel free to reply to this email or book a time to chat – www.chatwithlisareynolds.ca – together, we can develop a strategy tailored to your needs.
P.S. Don’t forget to share this update with friends or family who might benefit from staying informed about mortgage trends!