The Bank of Canada just made a big move that’s set to impact Calgary’s real estate market. On March 12, 2025, it lowered its key interest rate to 2.75% in response to economic pressures caused by international tariffs. For homebuyers and investors in Calgary, this change affects borrowing costs, mortgage rates, and overall affordability.
A lower interest rate can mean smaller mortgage payments, increased purchasing power, and more activity in the housing market. It’s a shift that creates new opportunities, but also raises questions about what’s next for buyers, homeowners, and investors.
This blog breaks down how the rate cut impacts Calgary’s real estate market and what it means for anyone looking to buy, refinance, or invest in property.
What Does the Interest Rate Cut Mean for Borrowers?
When the Bank of Canada lowers its interest rate, borrowing becomes cheaper. That means lower mortgage rates, which can make homeownership more affordable. It also encourages more people to enter the housing market, increasing demand for properties.
Lower interest rates also stimulate the economy by making loans more accessible for businesses and consumers. However, this can lead to inflationary pressures, particularly in the housing market, where increased demand may push prices higher.
How Will This Affect Mortgage Rates and Homebuyers?
With the interest rate cut, mortgage lenders in Calgary and across Canada are likely to lower their rates, making homeownership more affordable for buyers. A lower interest rate directly impacts how much borrowers pay on their mortgages, influencing everything from monthly payments to overall housing affordability. This is especially important in cities like Calgary, where market conditions are already shifting due to economic factors and buyer demand. Here’s what this means for homebuyer’s in Calgary:
- Lower Monthly Payments: With reduced mortgage rates, homebuyers will see smaller monthly payments, making homeownership more manageable, even with rising property values.
- Increased Purchasing Power: A lower interest rate means buyers can qualify for larger loans without significantly increasing their payments. This could open doors to homes that were previously out of reach.
- More Affordability in Calgary’s Competitive Market: Lower borrowing rates can make homes more accessible, attracting more buyers and increasing competition, especially in high-demand areas.
- Greater Demand and Possible Price Increases: As more buyers enter the market to take advantage of lower rates, demand for homes could rise, leading to potential price increases, particularly in sought-after neighbourhoods.
Should Homeowners Refinance Their Mortgages?
The interest rate cut presents a valuable opportunity to refinance and lower borrowing costs. Those with variable-rate mortgages will likely see a drop in their monthly payments as lenders adjust their rates, leading to immediate savings. Homeowners with fixed-rate mortgages may benefit from refinancing at a lower rate, potentially reducing the total interest paid over the life of the mortgage. This is particularly beneficial for those who secured their loans when rates were higher, as locking in a new lower rate could result in significant long-term savings.
For example, a homeowner who took out a $500,000 mortgage three years ago at a fixed rate of 5.5% might currently be paying around $3,000 per month in principal and interest. By refinancing at the new lower rate of 4%, their monthly payment could drop by several hundred dollars, adding up to thousands in savings over the years.
Beyond lower payments, refinancing can also provide access to home equity, allowing homeowners to tap into their property’s value for renovations, investments, or other financial needs. Whether it’s upgrading a home, consolidating debt, or funding a new opportunity, this rate cut creates favourable conditions for those looking to restructure their mortgage and maximize their financial options in Calgary’s real estate market.
How Will This Impact Real Estate Investors?
Now, you might be wondering, is the rate cut only beneficial for homebuyers and homeowners? What about investors? Well, this news is great for real estate investors too. With lower borrowing costs, securing properties becomes more affordable, improving cash flow and increasing the potential for higher profits.
Beyond helping you find a home, we connect you with trusted mortgage brokers, legal advisors, and home inspectors to make your buying journey as smooth as possible. With our in-depth market knowledge and commitment to client success, we ensure you feel confident at every step.
For investors in Calgary, this rate cut creates an ideal opportunity to expand portfolios and maximize returns in a market that’s becoming more accessible to buyers and still in demand for renters.
How Can You Take Advantage of the Interest Rate Cut?
Here are a few steps to make the most of this opportunity:
- Compare Mortgage Rates :Different lenders offer different rates, so shopping around can save you money.
- Lock In a Fixed-Rate Mortgage: Rates won’t stay low forever, so consider securing a long-term low rate.
- Act Fast If You’re Buying: With demand rising, moving quickly could help you secure a home before prices increase.
- Consider Refinancing: Homeowners should explore refinancing options to reduce monthly payments or free up equity.
The market is shifting, and it could be the perfect time to act. If you’re considering buying a home, refinancing, or making an investment, we’re here to help you take advantage of these changes.
At Keypoint Real Estate, we know the Calgary market inside out, and we are ready to help you figure out the best options for you. Get in touch with us today, and let’s talk about your options.
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