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Oct 13, 2025

With interest rates beginning to ease from recent highs and several positive indicators emerging, there’s reason for cautious optimism. Let’s dive in.

KEY DISCUSSION POINTS

Fixed Mortgage Rates

Currently, 5-year fixed rates range from approximately 3.94% to 4.44%, presenting attractive opportunities for home purchases, mortgage refinancing, or renewals. For context, the 50-year average for 5-year fixed mortgage rates in Canada is around 9.20%. This long-term benchmark—based on historical data from the Bank of Canada and Statistics Canada—reflects cycles ranging from the high-inflation peak of 21.75% in 1981 to the record lows of about 2.79% in 2021.
Decade averages further illustrate the trend: 11.20% in the 1970s, 13.60% in the 1980s, 9.50% in the 1990s, 6.80% in the 2000s, 4.50% in the 2010s, and 5.55% so far in the 2020s. These figures underscore how today’s rates remain well below historical norms, creating a generally favorable environment for borrowers—despite short-term volatility.
Looking ahead, fixed rates are expected to stabilize near current levels, though there remains a potential for upward movement in the near to medium term, depending on developments in the global bond markets. Stay tuned to my newsletters for updates as these trends continue to unfold.

Prime Rate:

The current Prime rate stands at 4.70%, following recent adjustments by the Bank of Canada. The next interest rate decision is scheduled for October 29, 2025. While a strong September jobs report has tempered expectations for another cut—reducing the likelihood somewhat—upcoming key data, such as the Consumer Price Index (CPI), could shift sentiment back toward further easing.
For context, the 50-year average Prime rate sits around 7.20%, capturing historical extremes from 22.75% in 1981 to 2.25% in 2009. Since the introduction of inflation targeting in 1991, the average has moderated to roughly 4.5%–5%, underscoring that today’s Prime rate remains advantageously low by historical standards.
Looking ahead, another Bank of Canada rate cut by the end of the month could bring the consumer Prime rate down to 4.45%. However, it’s important to remember that the Bank’s use of the Prime rate is often considered a blunt monetary policy tool—far less precise than the bond markets, which more directly influence fixed mortgage rates.
While the Prime rate is currently trending downward, borrowers should remain cautious when considering variable-rate products. If inflation proves persistent and economic indicators continue to strengthen, the Bank may be forced to pause or even reverse course in upcoming months.

Employment Gains

Canada added a net 60,400 jobs in September 2025, exceeding expectations and led by strong growth in Alberta, with manufacturing also contributing significantly. The unemployment rate held steady at 7.1%, signaling resilience in the labor market despite broader challenges. This positive data could influence monetary policy but also points to underlying economic strength.

Real Estate Market Trends

Overall, markets remain sluggish, with a subdued start to the fall season reflecting ongoing cautious buyer sentiment. However, after more than a year of corrections and adjustments, the pain appears to be easing, and signs of stabilization are emerging in the near term. This could pave the way for renewed activity as interest rates continue to moderate.
So, why consider acting now rather than later? Here’s the thing — for roughly the past 18 months, housing starts in Canada’s largest markets (particularly Toronto and Vancouver) have essentially stalled and are once again projected to dip slightly below 2024 levels. While this pause has temporarily improved affordability, it also sets the stage for the next supply-driven crisis.
Among the many statistics and data sets to monitor, housing starts may be the most telling indicator of what’s to come over the next few years. Historically, they are a lagging indicator, often at the heart of major real estate turning points. Although condo inventory currently appears saturated in several markets across Canada, it will eventually be absorbed—and when that happens, today’s limited new construction starts could lead to tighter inventory conditions ahead.
If you’re in the “waiting until prices drop further” camp, keep this in mind: with few or no new projects underway, it doesn’t take much imagination to see how quickly supply constraints could reshape the market once demand returns.

FINAL THOUGHTS

Perhaps it’s time to embrace today’s “uncertainty” as part of the natural ebb and flow of economic cycles, and boldly move forward with your aspirations? If the path feels attainable, why not seize the moment—whether by pursuing a better job, launching that business venture, advancing your education, or stepping into homeownership? Markets and economies are perpetually resetting and renewing themselves, often rewarding those who act with foresight. You could wait on the sidelines and join the crowd during the inevitable upswing, or position yourself now at one of the lower rungs to capitalize on long-term growth. In the world of mortgages and real estate, timing isn’t about perfection; it’s about aligning with your goals in a supportive rate climate like we’re seeing today.

Wondering if now is the right time for you? Don’t hesitate to reach out to me directly, let’s explore your options.