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Market Updates • 17 September 2025

Bank of Canada Lowers Policy Rate to 2.5% | Sept 17, 2025

by Susan Moffat

Sept 17, 2025: Today, the Bank of Canada announced a 0.25% reduction in its overnight policy rate, now set at 2.5%. This is the Bank’s first cut since March of this year. For homebuyers, this could mean slightly lower borrowing costs — a welcome shift for those entering the fall market.

 

Key Points

  • The target overnight rate is now 2.5%; Bank Rate at 2.75%, deposit rate at 2.45%.
  • The Bank cited softer economic growth, higher unemployment (now 7.1%), and slowing wage growth as reasons for the decision.

 

What the Rate Cut Could Means for Canadians

  • Borrowing Costs: With the overnight rate at 2.5%, mortgage rates and lines of credit may see a modest decline, providing some relief to variable-rate borrowers.
  • Real Estate: Lower rates can stimulate home-buying activity by improving affordability, but local market factors and buyer sentiment will also play a part.
  • Business Outlook: The Bank hopes that cheaper credit will encourage investment and help support job growth as the economy works through trade headwinds and slower population growth.

 

Looking Ahead

Governing Council signalled they’ll stay the course with a cautious approach, closely watching how ongoing trade tensions and labour market developments play out. The next rate announcement is scheduled for October 29, 2025, along with their latest Monetary Policy Report.

 

Final Thoughts

For anyone considering a home purchase, refinancing, or business expansion, today’s rate cut could offer opportunities. However, as always, it’s important to get advice tailored to your financial situation before making big decisions.

Disclaimer: This blog is for informational purposes only and does not constitute financial or legal advice. Always consult with qualified professionals for guidance specific to your circumstances.

Read the Press Release.

 

 

Whether you’re a homeowner, prospective buyer, or real estate investor, understanding these market changes is crucial. As your trusted REALTOR®, I’m here to help you navigate these shifts and make informed decisions! Call, text, email, or DM me to chat about how this announcement affects your real estate plans!

 

For more information, contact:

Susan Moffat, REALTOR® with Century 21 In-Studio Realty Inc., Brokerage
519.377.5154
susan.moffat@c21.ca

 

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