# BoC Rate Date - January 29, 2025 ![Jan29](https://d2r7yk1mqahd04.cloudfront.net/images/Jan29.png) ### January 29, 2025 # A step forward in affordability — but watch the ice. [Email link](https://mailchi.mp/ab02218e792d/monster-cut-5384289) The Bank of Canada steps into an already 'blustery' 2025 with a [single](https://www.truenorthmortgage.ca/blog/mortgage-rate-forecast) rate cut of 0.25%. Its policy rate now stands **at 3.0%**, with most bank prime rates slipping from 5.45% to **5.20%**. We **welcome** the central bank's warm way of ringing in the New Year. Since June 2024, a total of **2.0% has been melted off** its overly-cold policy rate. This latest stride toward improved home [affordability](https://www.truenorthmortgage.ca/tools/affordability-calculator) helps our clients by: - **Lowering** payments for floating variable-rate mortgages and HELOCs - **Lowering** the federal mortgage [stress test](https://www.truenorthmortgage.ca/blog/what-is-the-mortgage-stress-test) for home buyers who want to take advantage of a variable rate - Offering more **relief** to homeowners **nervous** about their upcoming mortgage [renewals](https://www.truenorthmortgage.ca/mortgage-solutions/renewals-transfers) The BoC's rate melt, however, is about to meet an **icy blast** of trade volatility. **Will it mean a pause in rate cuts?** ## Directly ahead: A pond-sized slippery patch of economic uncertainty. Just as Canada's economy started to look a little balmier for the year ahead, a sudden patch of **tariff-lined ice** [looms](https://www.truenorthmortgage.ca/blog/how-trumps-tariffs-could-shape-mortgage-rates-in-2025) — as the returning U.S. President threatens a trade-policy blowout. The odds are getting slimmer that Canada can avoid hitting that patch ([Bambi-flail](https://i.gifer.com/ESJ.gif) style), and **retaliation** is already being [planned](https://www.ctvnews.ca/politics/article/trump-tariff-threat-canada-preps-potential-pandemic-level-relief-plan-white-house-says-feb-1-still-holds/) to help stabilize the path forward (like Thumper helping from the sidelines). The Bank of Canada would face a new set of **inflation variables** to consider for its short and long term interest rate decisions, while contemplating how to keep the **economy** upright. #### **Grab our arm!** Our expert brokers are strapping on the winter treads to help steady your mortgage decisions and still save the most this year. > ## For now, a toe-hold on savings. > > Including today's prime rate cut, **variable rate mortgages** have seen 6 consecutive cuts for about **$560 shaved off** floating monthly payments since June 2024. > > (Based on a sample $500K mortgage, 25-year amortization and variable-rate discount of P-1.0%.) > > For those with [fixed](https://www.truenorthmortgage.ca/blog/will-your-variable-rate-payment-drop-when-rates-do) variable payments (with a big bank), your amortization is ticking down faster as **more $$$** goes towards your principal. --- ## How Trump's Tariffs Could Impact Mortgage Rates in 2025 Incoming U.S. President Donald Trump has vowed to **impose 25% tariffs** on all imported Canadian goods, pencilled in for Feb. 1, 2025. If he doesn't blink, the massive trade shock could **jackhammer** our economy and **reverberate** for mortgage rate decisions this year. And we'd see a different kind of inflation, called 'push-cost', that could **complicate** the (interest-rate) way forward for Bank of Canada decisions in 2025. Read all about it below. **A JACKHAMMER TO MORTGAGE RATES?** --- ## Underpinning today's rate SLIDE - The threat of tariffs likely helped push this rate cut through despite looming economic uncertainty (and underlying inflation pressures) - Interest rates aren't '[neutral](https://www.truenorthmortgage.ca/blog/mortgage-rate-forecast)' yet (too restrictive) - Canadians are struggling with higher prices — an RBC poll [revealed](https://www.ctvnews.ca/business/article/canadians-continue-to-struggle-financially-due-to-higher-costs-rbc-poll/) that 48% believe they won't ever be able to get ahead - Canadian company outlooks show conservative hiring and investment intentions - Retail spending was [flat](https://financialpost.com/news/retail-marketing/retail-sales-canada-fall-flat-after-surge) in November 2024 ## Layering toward a possible rate PAUSE? - December's headline [inflation](https://www.truenorthmortgage.ca/blog/mortgage-rate-forecast) rate came in at a cool-ish 1.9%, but strip out the 'G.S.T. Holiday' relief, and it was 2.3% - The 3-month-core inflation [metric](https://www.bankofcanada.ca/rates/indicators/key-variables/key-inflation-indicators-and-the-target-range/) is also showing warmth - December's labour report was better than expected — will the trend continue? - November and Q4 GDP may hit the BoC's forecast; better news than the contraction predicted - Trade disruption could make the BoC hold position to assess impact - Demand-pull inflation (the regular kind the BoC fights) might quickly rise if demand remains steady while supply tightens # WHERE ARE RATES GOING?? There's (obviously) a lot going on. **Stay in the know** — get economic updates and rate insights from CEO Dan Eisner. **[RATE FORECAST 2025](https://www.truenorthmortgage.ca/blog/mortgage-rate-forecast)** --- ## Time to floorhug your rate. When slippery economic conditions are afoot — stay close to the ground. Many lenders are **reducing** their [variable-rate](https://www.truenorthmortgage.ca/blog/should-you-choose-a-variable-or-fixed-rate) discounts and [fixed rates](https://www.truenorthmortgage.ca/blog/how-government-bond-yields-relate-to-mortgage-rates) are still **volatile.** Call your expert [broker](https://www.truenorthmortgage.ca/company) or [apply now](https://apply.truenorthmortgage.ca/apply-online/start) to **hold your mortgage rates** before they have a [chance](https://www.truenorthmortgage.ca/rates) to get back up. Check out our 5-year fixed rate deal! --- ## About to renew? Step into a better deal. Over **1M fixed-rate mortgages** are coming up for renewal in 2025. Over 80% are from the pandemic low-rate period, and current rates are **higher** by 2% or more. Don't just [accept](https://www.truenorthmortgage.ca/mortgage-solutions/renewals-transfers) your big-bank offer. It pays to look around and know how much a [rate discount](https://www.truenorthmortgage.ca/rates) could trim $$ off your mortgage payments. **Did you know?** Once locked into a 5-year fixed rate, the average term is only **3.89 years**. Your **mortgage flexibility** is also important — what may *look* like a good deal from your bank may also come with higher pre-payment [penalties](https://www.truenorthmortgage.ca/blog/posted-rates-vs-actual-rates) should you decide to break early. Plus, extra [fees](https://www.truenorthmortgage.ca/about-us/fees) for certain changes can add up. ### Take our renewal calculator for a spin. See how a better rate can change your payment and numbers. **[RENEWAL PAYMENTS](https://www.truenorthmortgage.ca/tools/renewal-calculator)** --- ## Icy patches? We bring the (mortgage) salt. (Lawn and pet friendly, of course.) Buying a home is the best feeling. Your mortgage rate and fit matters, as well as getting unbiased advice to help navigate life's financial [challenges](https://www.truenorthmortgage.ca/mortgage-solutions/complex-mortgages) along the way. We offer traction to get through the slippery spots — getting your best-possible rate and options, paying fewer fees, finding a better renewal deal, or using your [fine print](https://www.truenorthmortgage.ca/blog/mortgage-recast) for the changes you *can* make to save more. ## [EASILY APPLY](https://apply.truenorthmortgage.ca) online now **OR** ## [TALK TO A BROKER](https://www.truenorthmortgage.ca/company) in your preferred language **[GRAVITY-DEFYING RATES](https://www.truenorthmortgage.ca/rates)** --- ### Great advice is like walking with ski poles: - [Worried about your renewal? Get a leg up](https://www.truenorthmortgage.ca/blog/worried-about-your-mortgage-renewal) - [Thinking of buying a home? Strengthen your chances with a wintertime pre-approval](https://www.truenorthmortgage.ca/blog/why-wintertime-is-a-hidden-gem-for-mortgage-pre-approvals) - [Variable rate choice flips in popularity](https://www.truenorthmortgage.ca/blog/should-you-choose-a-variable-or-fixed-rate) - [Learn how bond yields push fixed rate changes](https://www.truenorthmortgage.ca/blog/how-government-bond-yields-relate-to-mortgage-rates) / /