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On October 29, 2025, the Bank of Canada announced it is lowering its policy interest rate by 25 basis points to 2.25%, with the deposit rate at 2.20% and the Bank Rate at 2.50%. This decision reflects the Bank’s ongoing response to weaker economic growth and softening inflation, as global trade challenges and slower consumer spending continue to weigh on Canada’s outlook. For the real estate market, this latest rate cut is meaningful. Lower borrowing costs can ease financial pressure for homeowners and prospective buyers alike, especially those with variable-rate mortgages or upcoming renewals. While the broader economy has shown signs of cooling—driven by lower export demand and cautious business investment—the housing sector continues to benefit from strong fundamentals and easing price pressures. Impacts on Buyers and Sellers With inflation trending closer to the Bank’s 2% target and shelter price growth moderating, affordability remains an important focus. This rate cut offers some relief for buyers, supporting more favorable mortgage conditions and potentially increasing purchasing power as we move into the final months of 2025. For sellers, the lower rate environment may help sustain buyer demand, even amid broader economic uncertainty. Employment growth has slowed modestly but remains positive in key sectors, and consumer confidence could see a lift from improved borrowing conditions heading into the winter season. Looking Ahead The Bank’s decision underscores its cautious but supportive stance as it navigates an evolving economic landscape. Global trade tensions, weaker business sentiment, and slowing U.S. demand remain ongoing challenges. However, Canada’s real estate market continues to demonstrate resilience, bolstered by steady population growth and easing inflation pressures. The next interest rate announcement is scheduled for December 10, 2025. Until then, this lower policy rate will help guide market activity and borrowing conditions as the year draws to a close. Have questions about how this affects your buying or selling plans? Contact us today for a personalized conversation about your next steps in the current market.