The Bank of Canada may have held its policy rate steady on June 4th—but that doesn’t mean there wasn’t big news. In In Conversation with Dr. Sherry Cooper, a virtual event many in the mortgage and finance space tuned into, Dr. Cooper shared key insights on the economic landscape, housing market trends, and what to expect moving forward.
Here’s a quick breakdown of what she covered and what it could mean for you as a current or future homeowner.
Interest Rate Cuts Still Expected—Just Not Yet
Although rates stayed unchanged this week, Dr. Cooper predicts we’ll see two more 25-basis-point cuts by fall, bringing the Bank of Canada’s policy rate down to 2.25% by the end of 2025.
That said, the BoC is waiting on two major indicators before making a move:
- Core inflation needs to ease
- The labour market must show more signs of weakening
In other words, they’re proceeding cautiously—but with rate relief still on the horizon.
What this means for you: If you’re looking to refinance, renew, or buy a home this year, now is a great time to connect and make a plan. You may want to act before competition picks up again when rates do start to drop.
Housing Market Outlook: Still Slow, But That’s an Opportunity
Home sales remain sluggish heading into summer 2025. According to Dr. Cooper, this “muted market” may actually work in buyers’ favour—offering more time to make decisions, negotiate, and secure favourable conditions.
Bonus insight: OSFI may adjust the mortgage stress test this year, potentially lowering the qualifying buffer below 200 basis points. This would make qualifying for a mortgage a little easier for many Canadians.
The Bigger Picture: Trade, Tariffs & Recession Warnings
Dr. Cooper also provided important context around Canada’s broader economic challenges:
- Mild recession is already here: Estimated at 0.5% GDP, driven by global volatility and trade exposure.
- Trade dependency remains high: 34% of Canada’s GDP is tied to trade, and 77% of our exports go to the U.S.
- Tariff uncertainty: Shifting U.S. policies are making it harder for the Bank of Canada to plan with confidence.
- Canada–U.S. policy rate gap: Ours is 160 bps lower than the U.S., thanks to our early action and trade sensitivity.
These global factors all influence mortgage strategy at home—so if you’re feeling uncertain, you’re not alone. The key is having a plan that works for your life, no matter what the market is doing.
Final Thoughts
With inflation, housing, and interest rates all in flux, staying informed is more important than ever. Whether you’re thinking of buying your first home, refinancing, or simply want to better understand your options—I’m here to help.
Let’s connect for a quick mortgage review or rate strategy chat. No pressure, just personalized advice.
If you missed In Conversation with Dr. Sherry Cooper, you can catch the replay here.
Need support navigating all of this?
Reach out anytime—I’ll walk you through it.
