Bank of Canada Interest Rate Announcement October 29th, 2025 - Fifth Avenue REM mediaiqdigital tracking pixel
Home Buying, Market Intelligence, Real Estate News, Your Next Home | October 29, 2025

The Bank of Canada (BoC) lowered its key interest rate by 0.25%, bringing it down from 2.50% to 2.25%.

This marks the second rate cut since September, as the Bank responds to a slowing economy and easing inflation.

The Bank of Canada has lowered its key interest rate for the second time in two months, a move that could reshape affordability and market confidence heading into 2026. As inflation cools and the economy slows, this policy shift may bring much-needed momentum back to Western Canada’s housing sector. Here’s what it means for homeowners, buyers, and developers.

Policymakers signaled they’ll continue to watch the data closely, but for now, this move is meant to help support growth and keep borrowing costs manageable for Canadians.

In Metro Vancouver, even a modest 0.25% rate reduction can make a tangible difference in affordability. With benchmark home prices still near record highs, lower borrowing costs could help re-engage sidelined buyers, especially first-timers and move-up purchasers who paused during last year’s tightening cycle. Realtors report early signs of increased mortgage pre-approvals and a pickup in show-home traffic across suburban hubs such as Surrey, Coquitlam, and Burnaby. If bond yields continue to ease, fixed rates may follow, further supporting activity through the winter season.

Entry-Level and Family Buyers Regain Confidence

  • In the Fraser Valley, where price sensitivity remains higher than in the city core, the Bank’s latest rate cut could provide the confidence needed for buyers to re-enter. Communities such as Langley, Abbotsford, and Chilliwack, which saw more balanced conditions in recent months, may see renewed competition for townhomes and single-family homes. Lower rates can also reduce carrying costs for investors, encouraging participation in new presale launches that had temporarily slowed earlier in the year.

Developers and Presale Activity

  • For developers across Western Canada, this rate environment offers an opportunity to reconnect with motivated buyers. With presale absorption rates expected to strengthen slightly, project launches in Q1 2026 could time well with improved consumer sentiment. While supply chain and construction costs remain considerations, lower financing rates may offset some pressure on both builder and buyer sides, creating a more balanced launch environment.

The Bank of Canada’s next interest rate announcement is set for December 10, 2025, and analysts suggest that if inflation continues to moderate and employment data remains soft, another modest cut could be on the table. While the central bank remains cautious, this latest move signals a willingness to support growth and stability heading into 2026.

For now, this is a timely opportunity to reassess your financial and real estate plans:

  • Homeowners: Review your mortgage or renewal strategy to take advantage of potential savings as lending rates adjust.
  • Buyers: Revisit your purchasing power as lower rates may expand your budget and bring new listings within reach.
  • REALTORS® and Developers: Anticipate renewed market activity as improved affordability and buyer confidence begin to take hold.

As conditions evolve, staying informed and proactive will help you make confident, data-driven decisions in a changing rate environment.

The Takeaway

The Bank of Canada’s decision to lower its key interest rate to 2.25% marks a turning point for borrowers and the broader housing market. It reflects growing confidence that inflation is under control and signals a more supportive stance toward economic growth.

For real estate participants across Western Canada, this shift could mean renewed opportunity, whether through improved mortgage affordability, increased buyer activity, or greater momentum in presale and development planning.

While no one can predict how quickly the full impact will unfold, today’s rate environment encourages action and preparation. Reviewing your mortgage, reassessing your investment strategy, or exploring new purchase opportunities now could help position you ahead of the next market cycle.

Share this post

Related posts

View all news