On Sept. 17, the Bank of Canada lowered its overnight policy rate by another 0.25 percent, bringing it down to 2.50 percent since their last cut in March. This marks the third cut in 2025, as the central bank works to support the economy, tame inflation and restore confidence for Canadian households.

After nearly three decades working for developers, a property management company and as a mortgage broker, I have seen how even small shifts in interest rates ripple through the housing market. This latest move by the bank is one of those moments where every segment of the market, from first-time buyers to investors, should be paying attention.

For those of us here in British Columbia, where affordability and supply remain on-going challenges, this rate cut provides a bit of breathing room and a new window of opportunity.

What you need to know

• Prime rate: Drops from 4.95 percent to 4.70 percent
• Variable and adjustable mortgages: Lower interest costs. Borrowers with adjustable-rate mortgages will see smaller monthly payments
• Fixed rates: Holding steady, but could ease further if bond yields trend lower
• Next Bank of Canada meetings: Oct. 29 and Dec. 10, as economists expect at least one more cut before year-end
• B.C. housing market: Buyers are returning, and confidence is improving after a quiet spring

What this means for homeowners

For those already holding a mortgage, the rate cut translates into direct savings.

• Adjustable-rate borrowers will see their payments drop by about $15 per $100,000 borrowed. On a $500,000 mortgage, that’s about $75/month back in your pocket. If you are on a variable-rate mortgage, your payments are fixed and more of your money now goes toward paying down the principal instead of interest.
• Fixed-rate borrowers who locked-in at five percent (common in 2023) should take a closer look at refinancing. With bond yields lower, the penalties to break your mortgage are often less punishing right now. In many cases, homeowners could save tens of thousands over the next few years by restructuring their mortgage.

The message here is clear: If you haven’t reviewed your mortgage recently, now is the time.

What this means for buyers

• First-time buyers

Lower rates improve affordability, especially if you are exploring variable/adjustable-rate mortgages, which now sit below fixed rates. Add government incentives such as GST relief on new construction, and the path to ownership is slightly less steep. While B.C. prices remain high compared to the rest of Canada, the combination of lower borrowing costs and balanced inventory creates an opening that didn’t exist earlier this year.

• Up-sizers and down-sizers

Whether you are growing into a bigger home or simplifying your lifestyle, today’s environment offers choice and flexibility. Inventory levels in B.C. remain steady, which means you are less likely to face intense bidding wars. Pair that with lower financing costs, and it’s a strategic time to make a move.

• Investors

Lower borrowing costs improve cash flow, making rental properties and new projects more appealing. While supply has improved, B.C. still faces long-term structural shortages relative to demand. For investors, this is an opportunity to get positioned before conditions tighten again.

Fixed versus variable: The on-going question

Right now, variable/adjustable rates are slightly lower than fixed. Economists expect the Bank of Canada to cut another 0.50 percent by early 2026. If that plays out, those in variable mortgages stand to benefit most.

That said, there’s no “one size fits all.” Fixed rates provide predictability, which can be reassuring for families managing tight budgets. Variable rates offer flexibility and potential savings but require more comfort with market fluctuations. With three decades in this business, my advice is always the same: The right choice depends on your financial situation, goals and tolerance for risk.

The bigger economic picture

This latest rate cut comes as Canada’s economy shows a mix of strengths and weaknesses:

• Employment: Job losses have been concentrated in trade-sensitive industries, with overall hiring slowing.
• Inflation: At 2.5 percent, inflation is easing back toward target, giving the bank room to cut rates.
• Growth: Canada’s economy contracted in Q2, but the hope is that lower rates will spark more consumer spending.
• B.C. housing: Sales are rebounding after a soft spring, prices remain relatively stable and buyer confidence is strengthening.

Globally, uncertainty remains high. The U.S. Federal Reserve has also cut rates, Europe is dealing with slower growth, and China’s economy is softening. Still, Canada is relatively well-positioned. For B.C. in particular, population growth continues to put steady demand under housing, keeping our market more resilient than many others.

Why this matters for you

When rates move down, affordability improves and confidence grows. This is particularly important in B.C., where housing affordability has been stretched for years.

• For first-time buyers, the window to enter the market just widened.
• For current homeowners, refinancing opportunities could unlock serious savings.
• For up-sizers and down-sizers, today’s stable pricing plus cheaper borrowing makes for a strategic moment to move.
• For investors, lower rates mean stronger cash flow and improved returns.

In short: This isn’t just a technical policy change, it’s a real chance to make progress toward your housing goals.

In conclusion

Real estate rewards those who are prepared. Rate cuts like this don’t happen every day and when they do, they open doors.

Whether you are thinking about buying your first home, moving into something that better fits your life, or refinancing to save on interest, this is the time to explore your options.