📉 Will Mortgage Rates Drop Before the Holidays? Expert Predictions for Q4 2025
Introduction
As we move closer to the end of 2025, Canadian homeowners and buyers wonder: Will mortgage rates finally soften before the holidays? With inflation cooling, bond yields under pressure, and central banks signaling potential easing, many experts see room for rate cuts. Below is a breakdown of market forecasts, risk factors, and what this could mean for your mortgage strategy this fall.
1. What Experts Are Predicting
According to the True North Mortgage forecast, fixed rates could decline another 0.5% by end-2025 if bond yields and inflation continue to ease.
TD Economics places expectations on the Bank of Canada’s policy rate falling to 2.25% by mid-2026, implying downward pressure on borrowing rates.
Mortgage-rate watchers expect variable rates to respond more quickly than fixed rates to any BoC cuts, giving variable holders potential early relief.
Some forecasts caution that fixed-rate declines may lag if lenders remain cautious in pricing, even after policy easing.
3. What This Means for Fixed vs Variable Mortgages
Variable-rate borrowers are likely to benefit first if the BoC cuts policy rates — your payments may adjust downward relatively quickly.
Fixed-rate borrowers may see slower rate movement, as fixed rates depend on longer-term yield curves and lender pricing.
If you expect continued rate cuts, a shorter fixed term or a hybrid (split fixed + variable) mortgage might offer a balanced approach.
4. Strategies to Position Yourself Now
Lock in a rate hold — many lenders let you reserve a rate for 60–120 days while you finalize your purchase or refinance.
Shop with a mortgage broker — they can help you access early rate cuts or better pricing before it becomes public.
Opt for flexible or shorter terms — this gives you the option to refinance again if rates fall more.
Prepare your renewal ahead of time — if your mortgage term is ending soon, get renewal offers ready so you can act quickly.
