Bank of Canada's Steady Rate: What It Means for Calgary Wallets

The Bank of Canada has once again delivered, cutting its target interest rate to 2.25% on October 29, 2025. This move is big news for Calgarians, especially those keeping a close eye on their mortgages and savings amidst our city's dynamic real estate market and evolving economic landscape.

For homeowners, this cut translates to potentially lower loan costs, offering some much-needed predictability. Experts indicate that each 0.25% rate reduction can significantly decrease monthly mortgage payments, making homeownership more accessible and boosting buyer confidence. Calgary's real estate market is already anticipated to see average home prices rise by 4.5% in 2025, fueled by increasing buyer confidence and these falling interest rates. Lower rates also make it easier for buyers to qualify for mortgages, even under the stress test, and free up household budgets for other expenses. First-time buyers, who might have been sidelined by higher rates in recent years, are now cautiously re-entering the market, with strong demand seen in condos and townhomes.

While our city's economic ties to energy and trade remain strong, global trade tensions continue to cast a shadow. Unpredictable U.S. tariff policies are a factor the Bank of Canada is navigating, and these disruptions are expected to restrain economic growth in the coming years. Despite this, Calgary's economy is projected to outperform Alberta and Canada overall, supported by population growth and diversification into sectors like tech and renewable energy. This interest rate reduction aims to provide crucial support, ensuring that even with external pressures, Calgarians can find a bit more breathing room in their finances.