Welcome to this week’s Make Money Count! In today’s episode, Marcus & Justin discuss the big questions surrounding interest rates in 2025. What do Canada’s major banks predict? How will global events, such as potential tariffs and political shifts, influence our economy? 

2025 Interest Rate Predictions: What the Banks Are Saying

Major Canadian banks have shared varied forecasts for interest rates in 2025. Scotiabank expects a modest rise due to inflation concerns, while National Bank predicts a slight drop, citing a slowing economy. RBC and TD Bank take a middle-ground approach, suggesting rates will remain relatively stable as the Bank of Canada balances inflation control with economic growth. These differing predictions highlight the uncertainty and the need to stay informed about potential changes.

Factors Impacting Interest Rates in 2025

Interest rates in 2025 will depend on key factors like inflation, global economic conditions, and domestic growth. Persistent inflation may push rates higher, but recent signs of cooling inflation could reduce the need for aggressive hikes. Global trends, such as U.S. tariffs or geopolitical tensions, might influence Canada’s economy, while steady unemployment levels could encourage the Bank of Canada to keep rates low to boost growth. Monitoring these variables is essential for predicting rate movements.

How Tariffs Could Shake the Economy

With discussions about potential U.S. tariffs on Canadian goods gaining momentum, the economic landscape could shift dramatically. What does this mean for Canadian businesses, consumers, and interest rates? We break down the possibilities and the political rhetoric driving these conversations.

Is It Time to Switch to a Variable Rate?

While some mortgages may come with hefty penalties to break, staying locked into a high interest rate can cost you more! Interest rates directly affect homeowners and investors, shaping financial decisions in 2025. Homeowners with variable-rate mortgages might benefit from potential rate drops, leading to lower monthly payments, while fixed-rate borrowers could lock in favorable rates if stability continues.

Investors may shift toward equities or alternative investments, such as Mortgage Investment Corporations (MICs), which offer higher returns compared to traditional savings accounts. Staying informed about these trends ensures better decision-making in a dynamic economic environment.

Big changes are coming, and staying prepared is more important than ever. While the future of interest rates remains uncertain, tracking expert forecasts and economic indicators can help you stay ahead. Whether rates rise, fall, or stabilize, being proactive about your mortgage and investment strategies is vital. At Cannect, we’re here to help Canadians find tailored mortgage solutions and high-return investment opportunities.

Do you have questions or thoughts? We’d love to hear from you! Reach out to us, and let’s tackle this financial journey together.

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