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Navigating the Mortgage Landscape in January 2025: Stats, Rates, and Inflation

As we step into 2025, the mortgage landscape in Canada continues to evolve. Here's a snapshot of the current mortgage stats, Bank of Canada interest rates, and inflation trends as of January 2025.

Current Mortgage Stats

The mortgage market has seen some fluctuations over the past year. As of January 22, 2025, the average rates for various mortgage terms in Canada are as follows:

  • 5-year fixed-rate mortgage: 4.09%
  • 3-year fixed-rate mortgage: 4.64%
  • 2-year fixed-rate mortgage: 4.79%
  • 1-year fixed-rate mortgage: 4.09%
  • 5-year variable-rate mortgage: 4.4%

These rates reflect a slight decrease from the previous month, offering some relief to prospective homebuyers. However, financing conditions remain challenging for many.

Bank of Canada Interest Rates

The Bank of Canada (BoC) has been on a rate-cutting spree since mid-2024. The current policy interest rate stands at 3.25%. The BoC is set to announce its first rate decision of the year on January 29, 2025. Analysts predict a further 25 basis point cut, bringing the rate down to 3.00%. This move is expected to make borrowing cheaper for Canadians, especially those with variable rate mortgages.

Inflation Trends

Canada's inflation rate has seen a significant decline over the past year. As of December 2024, the inflation rate fell to 1.8%, down from the highs seen in 2022. The federal government's GST holiday has contributed to this decline by reducing prices across several categories, including restaurant food, alcohol, and children's clothing. The BoC's target inflation rate is 2%, and the current rate is well below this target.

Looking Ahead

The outlook for 2025 is cautiously optimistic. The BoC's shift from an inflation-fighting stance to an economy-boosting approach has helped stabilize the housing market. Economists expect a gradual improvement in home sales and prices throughout the year. However, uncertainties remain, and the BoC will continue to monitor economic data closely to make informed decisions on interest rates.

How to Become a Mortgage Representative for Lendworth
Are you passionate about real estate and finance? Do you have a knack for helping people achieve their financial goals? Joining Lendworth as a mortgage broker could be your next career move.