Is the Economy Going to Crash? What Canadian Home-buyers Need to Know

With new U.S. tariffs on Canadian goods and Canada's retaliatory measures, many home-buyers and homeowners are asking:

• Are mortgage rates going to go down in 2025?
  
  

• Is the economy going to crash?
  
  

• How will tariffs impact home prices and affordability?
  
  

These concerns are especially important for first-time buyers, homeowners renewing their mortgages, and those considering refinancing. While it's impossible to predict the future with certainty, the Bank of Canada (BoC) is widely expected to cut interest rates in 2025 to offset economic uncertainty.

However, rising inflation and shifting trade policies could slow down rate cuts. If you're looking for the best mortgage strategy, consulting a Toronto mortgage broker can help you navigate the market effectively.

Here’s what you need to know about how these tariffs could affect Canada’s economy, mortgage rates, and home affordability in the coming months.

Will Mortgage Rates Go Down in 2025?

The Bank of Canada has been signalling interest rate cuts, but how low they go—and how quickly—depends on several factors:

1. Tariffs Are Slowing Economic Growth

• New U.S. tariffs on Canadian goods and Canada's retaliatory tariffs on U.S. imports are increasing costs for businesses and consumers.
  
  

• If economic growth slows significantly, the BoC may lower rates to stimulate borrowing and spending.
  
  

2. Inflation is Still a Concern

• Higher tariffs typically lead to higher consumer prices, increasing inflation risks.
  
  

• The BoC must balance rate cuts while controlling inflation, which could slow down aggressive rate reductions.
  
  

3. Global Uncertainty Adds Risk

• The U.S. election, geopolitical tensions, and financial market fluctuations add unpredictability.
  
  

• If the global economy weakens, rate cuts may come sooner and be deeper than expected.
  
  

What Does This Mean for You?

• Mortgage rates are expected to decrease, but economic uncertainty remains.
  
  

• If you’re buying a home, renewing a mortgage, or refinancing, consider locking in a rate now while keeping flexibility for future adjustments.
  
  

Should You Lock in a Mortgage Rate Now or Wait?

With rates projected to drop, many home-buyers wonder: Should I lock in a mortgage rate now or wait?

The good news? Most lenders allow you to lower your rate if rates drop before closing.

Why Locking in Now is a Smart Move

✅ Protects You from Rate Hikes – If inflation spikes or the BoC slows cuts, mortgage rates could rise instead of falling. Locking in secures your rate.

✅ Most Lenders Allow Rate Adjustments – Many Toronto mortgage brokers work with lenders who offer rate drop protection before closing, so you won’t miss out.

✅ Economic Uncertainty Makes Waiting Risky – Tariffs, inflation, and global tensions make mortgage rate movements unpredictable. Acting now ensures you get the best available rate.

Is the Economy Going to Crash? What This Means for Canadian Home-buyers

While Canada’s economy faces uncertainty, experts do not expect a full-blown crash. Instead, we’re likely to see:

🔹 Slower economic growth due to higher costs from tariffs and inflation.
🔹 Lower interest rates as the BoC attempts to stimulate the economy.
🔹 A cooling housing market in some regions as affordability challenges impact demand.

The best thing you can do? Stay informed and make proactive mortgage decisions to protect your financial future.

Work with a Toronto Mortgage Broker to Secure the Best Rate

Navigating today’s mortgage market can be overwhelming, but you don’t have to do it alone. Whether you’re:

🏡 Buying a home
💰 Renewing your mortgage
📉 Refinancing for a better rate

A Toronto mortgage broker can provide expert guidance to help you secure the best mortgage strategy.

📞 Call me at 647-694-7033 or email [email protected] to discuss your options today!

Final Thoughts

With 2025 mortgage rates expected to decrease, it’s a great time to explore your mortgage options. However, economic uncertainties make strategic planning essential. Locking in a rate now while maintaining flexibility could be your best move.

💡 Looking for expert mortgage advice? Connect with a trusted Toronto mortgage broker today and take control of your financial future!

FAQs About Mortgage Rates & the Economy

1. Will mortgage rates in Canada drop in 2025?

Yes, the Bank of Canada is expected to cut interest rates, but economic factors like inflation and tariffs could influence how quickly and how much they drop.

2. Should I choose a fixed or variable mortgage in 2025?

It depends on your risk tolerance. A fixed-rate mortgage offers stability, while a variable-rate mortgage could help you save money if rates drop further.

3. How do U.S. tariffs affect Canadian mortgage rates?

Tariffs can slow economic growth and increase inflation, affecting how aggressively the BoC lowers interest rates.

4. Can I lock in a mortgage rate now and still get a lower rate later?

Yes! Many lenders allow you to adjust to a lower rate before closing, giving you the best of both worlds.

5. What if the economy crashes? Will mortgage rates drop further?

A severe downturn could lead to faster and deeper rate cuts. However, it’s best to consult a Toronto mortgage broker to assess market trends.

6. How can a Toronto mortgage broker help me save money?

A mortgage broker has access to multiple lenders and can help you find the best rate and terms, saving you thousands over time.

Get Expert Mortgage Advice Today!

🔹 Call: 647 694-7033
📧 Email: [email protected]

Let’s build a mortgage strategy that works for you!