Welcome to the latest episode of Make Money Count! The Bank of Canada just made its call—and it wasn’t a surprise. Variable-rate mortgage holders were hoping for a drop, but this could just be the calm before the rate-cut storm. In this episode, Marcus & Justin break down what the hold means, how it impacts you, and why now might still be the right time to make a move.
Episode Highlights
Inflation Is Slowing, But Not Everywhere
March’s CPI numbers came in at 2.3%, beating expectations in the best way possible. It’s the lowest annual inflation rate we’ve seen in a long time. Here’s what’s behind the numbers:
- Food inflation is still sticky (thanks, grocery giants 👀).
- Shelter, clothing, and transportation costs have declined.
- Gasoline prices dropped as oil prices and the carbon tax decreased.
Translation? The economy is slowing. Unemployment is rising, consumer spending is tightening, and the Bank of Canada knows it. That’s why a rate cut is still firmly on the table—just not this month.
Fixed Mortgage Rates: Tempting, but…
Bond yields are holding steady at around 2.7%, and we’ve seen 5-year fixed rates as low as 3.75%. That’s a slim margin. It also means banks are aggressively trying to lock borrowers into fixed terms.
It might seem attractive to “lock it in” and forget about it—but there’s more going on under the hood.
Why We’re Still Team Variable
Even though rates didn’t drop in April, we’re strongly expecting two cuts of 25 basis points—one in June and one in July. If those happen, prime could fall like this:
- From 4.95% → 4.70% (June)
- Then → 4.45% (July)
- And possibly → 4.20% by year-end
That means your variable rate would get cheaper, and you’d benefit from lower payments or more principal pay down each month.
The Smart Strategy for 2025: Wait, Watch, and Win
Right now, we advise most of our clients to stick with their variable rates and hold off on converting to a fixed rate. Why?
Because by staying variable through these upcoming cuts, you’ll:
- Save more over the next 6–12 months
- Keep the option open to lock in at even lower fixed rates once the dust settles
- Maintain flexibility in a shifting market
Unless there’s a surprise economic boom, this playbook will serve you well.
Final Word: This Is Your Braveheart Moment—HOLD
This isn’t the time to panic. It’s time to be strategic. Stay variable. Ride the coming wave of rate cuts. And be ready to lock into a sub-3.5% fixed rate when the bond yields fall in line with the slowing economy.
Need Help Navigating Your Mortgage Options?
At Cannect, we help Canadians make smart decisions that actually save money. Whether you’re buying your first home or refinancing, we’ll build a custom plan that fits your life and your goals.
