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🏦 Bank of Canada Lowers Policy Rate to 2.25% — What It Means for Homeowners and Buyers

Posted on October 29, 2025 by Tara Johnson

The Bank of Canada has lowered its overnight rate by 25 basis points to 2.25%, with the Bank Rate at 2.50% and the deposit rate at 2.20%.

This latest move is part of the Bank’s ongoing effort to support Canada’s slowing economy while keeping inflation near its 2% target.

💡 What Does This Mean for You?

✅ Variable-Rate Mortgage Holders:
Expect a modest but welcome drop in your monthly payments as lenders adjust their prime rates to reflect this latest cut. Even a small decrease can make a noticeable difference over time.

✅ Fixed-Rate Borrowers and Renewals:
While fixed rates don’t move directly with the Bank of Canada’s policy rate, bond yields often follow policy trends. This could mean potential savings if you’re renewing your mortgage or considering refinancing soon.

📉 Overall Market Outlook:
The Bank notes that the current rate is likely close to the “neutral” zone — meaning we may not see many more cuts unless the economy slows further. Still, it remains ready to adjust again if economic conditions change.

📊 Why the Bank Made This Move

Weaker Growth: Canada’s economy contracted 1.6% in Q2, with exports and business investment both softening.
Soft Labour Market: Unemployment sits at 7.1% (as of September), with job losses in trade-sensitive industries.
Sticky Inflation: While CPI inflation eased to 2.4%, core inflation remains around 3%, showing that price pressures persist.
Global Headwinds: Ongoing U.S. trade actions and tariffs continue to strain Canada’s manufacturing and export sectors.
Gradual Recovery Ahead: The Bank projects GDP growth of 1.2% in 2025 and 1.1% in 2026, with a slow but steady recovery expected into 2027.

🏠 What This Means for the Alberni Valley Real Estate Market

Here in the Alberni Valley, where affordability and lifestyle remain key draws for buyers, a lower interest rate can help boost confidence and increase borrowing power.

We could see more movement in the market as buyers take advantage of lower rates and sellers gain access to a larger pool of qualified buyers.

If you’ve been waiting to make a move — whether that’s buying your first home, upgrading, or investing — this rate cut might be the opportunity you’ve been waiting for.

📩 Let’s chat about how this change could impact your real estate plans in the Alberni Valley.
I’d be happy to walk you through your options and help you make the most of this evolving market.