The Bank of Canada recently announced a significant change to its monetary policy. This is a move that directly impacts Fraser Valley mortgage rates and homeowners in Mission, BC. For the first time in a while, the Bank has decided to lower its target for the overnight rate. This decision could signal a new phase for our local housing market and may present fresh opportunities for you, whether you’re a buyer or a seller.

The New Policy Rate Explained

On September 17, 2025, the Bank of Canada reduced its key policy rate by 25 basis points, bringing it down to 2.5%. This is a crucial number to watch because it influences the interest rates on mortgages. When the Bank lowers its rate, it can lead to lower rates for borrowers, potentially making it more affordable for you to buy a home or renew your mortgage.

Why Did the Bank Lower the Rate?

The Bank’s decision was a response to several global and domestic economic factors. Here’s a quick summary of the key drivers:

  • Slowing Global Economy: Global economic growth is showing signs of slowing down. This is due in part to sharply higher US tariffs and ongoing trade uncertainty.
  • Canadian GDP Decline: Canada’s economy experienced a decline in the second quarter. This was largely because of the impact of tariffs and trade uncertainty on economic activity. Exports fell by 27% in the second quarter.
  • Labor Market Weakness: The labor market has weakened, with a decline in employment and a rise in the unemployment rate to 7.1% in August. Wage growth has also eased.
  • Controlled Inflation: While inflation has been close to the Bank’s target, it’s not at risk of rising out of control. The federal government’s recent decision to remove some retaliatory tariffs on US goods will also help to keep prices in check.

With a weaker economy and a manageable inflation outlook, the Bank decided that lowering the policy rate was an appropriate step. This move is designed to support economic growth and boost confidence.

What’s the Impact on Fraser Valley Mortgage Rates?

This change directly affects the real estate market.

  • For Homebuyers: A lower policy rate could translate to lower mortgage rates. This means your borrowing power might increase, and the cost of owning a home could become more accessible. Now may be an excellent time to get pre-approved or re-evaluate your budget.
  • For Homeowners: If you have a variable-rate mortgage, your payments could decrease. If you are a homeowner considering a move, this can provide an excellent opportunity to sell and buy.

The Bank will continue to monitor how trade shifts affect business investment, employment, and consumer spending. They are committed to supporting economic growth while keeping inflation in check. The next scheduled rate announcement is October 29, 2025.

If you have questions about how this interest rate change might affect your plans to buy or sell, please give me a call. I’m here to help you navigate the ever-changing market and ensure you make the best financial decisions. Check out my current listings here!