
I hope you’re having a wonderful day so far! Here’s your mortgage update for the week, keeping you informed about the current market and what it could mean for you as a homeowner or future buyer.
For many of our clients, 2024 felt like one surprise after another. Let’s take a closer look at five key events that shook the housing and rate markets last year—and explore their potential impact on 2025.
#1 - The Bank of Canada Gets Cut-Happy
In 2024, the Bank of Canada aggressively cut rates, making moves that resembled a clearance sale—five cuts totaling 175 basis points. By December, the prime rate had dropped to 5.45%, as the Bank scrambled to counter a slowing economy.
2025 Outlook:Unemployment may rise above 7%, but slowing population growth and a potential U.S.-led economic rebound (barring any damaging tariffs) could help keep job losses under control. This stability is promising for both mortgage arrears and new originations.
#2 - U.S. Tariffs Loom Large
President Donald Trump proposed a 25% tariff on Canadian goods, citing issues like drug trafficking and illegal immigration. While some dismissed it as posturing, the announcement caused significant concern in Canada.
2025 Outlook:Given the U.S.’s reliance on Canadian resources, a prolonged trade war seems unlikely. If tariffs are imposed, they will likely be temporary and capped at 10%. However, if a trade war does escalate, we could see mortgage rates drop sharply in the short term, followed by inflation and higher rates later.
#3 - Canadian Politics Turns into a Soap Opera
Finance Minister Chrystia Freeland’s sudden resignation in December threw the government into turmoil. This, combined with tariff threats, inflationary spending proposals, and public dissatisfaction, led to a significant loss of confidence in the Trudeau administration.
2025 Outlook:A federal election could happen as early as spring. If Pierre Poilievre takes office, his focus on spending cuts and pro-business policies could boost investor confidence and stabilize bond yields, keeping mortgage rates manageable.
#4 - Unemployment Climbs the Charts
Unemployment hit a three-year high of 6.8% in November, despite strong job growth for workers aged 25 and older. This prompted the Bank of Canada to introduce further rate cuts in late 2024.
2025 Outlook:Canada weathered the 2024 rate hike storm better than expected. While unemployment remains high, inflation finished the year at 2.65%, above the Bank’s 2% target. This persistent inflation could limit further rate cuts in 2025.
#5 - Real Estate Finds Its Floor
After a sluggish year, home prices flatlined in 2024, supported by falling rates, rising incomes, and improved sentiment. By year-end, real estate activity had reached two-year highs.
2025 Outlook:Experts expect moderate home price growth this year, driven by lower rates, better affordability, and rising incomes. However, falling rates—the key driver—remain uncertain. While additional Bank of Canada cuts are likely, bond yields could remain volatile due to U.S. policy and inflation concerns.
Mute the Noise, Master Risk Management
Uncertainty is a given in the mortgage market, but Canada’s housing sector has consistently weathered challenges. For 2025, I encourage my clients to focus on financial stability by:
Lowering debt
Paying down mortgages
Budget planning
Saving where possible
Avoiding being “house poor”
As your mortgage broker, my goal isn’t just to secure the largest mortgage but to ensure you’re in a strong financial position. Consolidation, risk mitigation, and avoiding regretful decisions are key priorities for me—and they should be for you, too.
Finding the Right Mortgage in 2025
The 3-year fixed term could be the sweet spot this year, offering protection from rate fluctuations, lower penalty risks, and attractive pricing. Alternatively, a 5-year hybrid mortgage (part fixed, part variable) allows you to tailor your rate exposure to your comfort level. This is the product I personally have, and I’d be happy to explain why it works well in today’s market.
Have questions about your mortgage or want to compare your current rate with what’s available? Let’s chat! You can book a time directly on my calendar here: www.emilycallme.com

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