2025 Mortgage Rate Forecast: What BC Homebuyers Need to Know
By Peter Park, Mortgage Broker in British Columbia
Posted March 2025 | Category: Mortgage Market Insights
Wondering where mortgage rates are heading in 2025? You’re not alone. From trade tensions to inflation surprises, there’s a lot going on behind the scenes—and it all impacts how much you’ll pay to borrow.
Here’s what you need to know about the current mortgage rate forecast in British Columbia and how to make smart decisions whether you're buying, refinancing, or renewing in 2025.
📈 The Economic Wild Card: Tariffs and Trade Uncertainty
Late 2024 saw stronger-than-expected economic growth. But the good vibes may not last.
With U.S. tariffs on Canadian imports looming, financial markets are jittery. These tariffs could increase business costs, reduce consumer spending, and ultimately drag down Canada’s GDP by as much as 3%, according to the Bank of Canada.
That’s nearly enough to tip us into a recession.
🏦 Bank of Canada’s Tightrope: Inflation vs. Growth
The Bank of Canada is in a tricky spot.
Interest rate cuts could help stimulate the economy…
…But retaliatory tariffs may push inflation 0.5 percentage points higher than normal.
And the Bank can’t cut too aggressively if inflation is already above its 2% target.
So, what’s the move?
The current expectation is a policy rate reduction to 2.5%, but further cuts depend on whether inflation stays high or cools off.
💸 Where Are Mortgage Rates Headed?
Here’s what the BCREA (BC Real Estate Assocation) forecast shows for the rest of 2025:
Term Q2 2025 Q3 2025 Q4 2025
Variable Rate 4.25% 4.25% 4.25%
5-year Fixed (Uninsured) 4.35% 4.35% 4.35%
➡️ Takeaway: The average 5-year fixed mortgage rate is forecast to hover around 4.35%, assuming inflation doesn’t spiral.
🔧 What This Means for You
Whether you're a first-time buyer, investor, or homeowner renewing your mortgage, here’s how to navigate the current environment:
🏠 First-Time Buyers
Rate stability ahead could be a good opportunity to enter the market.
Pre-approval still matters—especially with a qualifying rate of 6.5%.
🔁 Refinancers
If you’re holding a higher-rate mortgage from 2023–2024, refinancing this year could save you thousands in interest.
🧑💼 Self-Employed or Alternative Borrowers
Expect B-lenders to stay active, especially as traditional lenders tighten criteria during uncertain economic periods.
🧠 Final Thoughts
The mortgage landscape in 2025 is a mixed bag: stable rates, rising uncertainty, and inflation keeping everyone on their toes.
As your trusted mortgage broker in British Columbia, my job is to help you make sense of the noise and create a financing strategy that works for your life—not just the economy.
📞 Let’s Talk Strategy
Thinking about buying, refinancing, or just want to run some numbers?
👉 Schedule a free consultation with me or reach out directly at [email protected]
