Bank of Canada Rate Announcement Mar 12th, 2025

Tonia Jacobsen • March 12, 2025

Bank of Canada reduces policy rate by 25 basis points to 2¾%


FOR IMMEDIATE RELEASE

Media Relations

Ottawa, Ontario

March 12, 2025


The Bank of Canada today reduced its target for the overnight rate to 2.75%, with the Bank Rate at 3% and the deposit rate at 2.70%.


The Canadian economy entered 2025 in a solid position, with inflation close to the 2% target and robust GDP growth. However, heightened trade tensions and tariffs imposed by the United States will likely slow the pace of economic activity and increase inflationary pressures in Canada. The economic outlook continues to be subject to more-than-usual uncertainty because of the rapidly evolving policy landscape.


After a period of solid growth, the US economy looks to have slowed in recent months. US inflation remains slightly above target. Economic growth in the euro zone was modest in late 2024. China’s economy has posted strong gains, supported by government policies. Equity prices have fallen and bond yields have eased on market expectations of weaker North American growth. Oil prices have been volatile and are trading below the assumptions in the Bank’s January Monetary Policy Report (MPR). The Canadian dollar is broadly unchanged against the US dollar but weaker against other currencies.


Canada’s economy grew by 2.6% in the fourth quarter of 2024 following upwardly revised growth of 2.2% in the third quarter. This growth path is stronger than was expected at the time of the January MPR. Past cuts to interest rates have boosted economic activity, particularly consumption and housing. However, economic growth in the first quarter of 2025 will likely slow as the intensifying trade conflict weighs on sentiment and activity. Recent surveys suggest a sharp drop in consumer confidence and a slowdown in business spending as companies postpone or cancel investments. The negative impact of slowing domestic demand has been partially offset by a surge in exports in advance of tariffs being imposed. 


Employment growth strengthened in November through January and the unemployment rate declined to 6.6%. In February, job growth stalled. While past interest rate cuts have boosted demand for labour in recent months, there are warning signs that heightened trade tensions could disrupt the recovery in the jobs market. Meanwhile, wage growth has shown signs of moderation.


Inflation remains close to the 2% target. The temporary suspension of the GST/HST lowered some consumer prices, but January’s CPI was slightly firmer than expected at 1.9%. Inflation is expected to increase to about 2½% in March with the end of the tax break. The Bank’s preferred measures of core inflation remain above 2%, mainly because of the persistence of shelter price inflation. Short-term inflation expectations have risen in light of fears about the impact of tariffs on prices.


While economic growth has come in stronger than expected, the pervasive uncertainty created by continuously changing US tariff threats is restraining consumers’ spending intentions and businesses’ plans to hire and invest. Against this background, and with inflation close to the 2% target, Governing Council decided to reduce the policy rate by a further 25 basis points.


Monetary policy cannot offset the impacts of a trade war. What it can and must do is ensure that higher prices do not lead to ongoing inflation. Governing Council will be carefully assessing the timing and strength of both the downward pressures on inflation from a weaker economy and the upward pressures on inflation from higher costs. The Council will also be closely monitoring inflation expectations. The Bank is committed to maintaining price stability for Canadians.


Information note

The next scheduled date for announcing the overnight rate target is April 16, 2025. The Bank will publish its next full outlook for the economy and inflation, including risks to the projection, in the MPR at the same time.


Tonia Jacobsen

Mortgage Expert

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How to Access Your Home Equity Wisely

By Tonia Jacobsen • September 10, 2025
Need to Free Up Some Cash? Your Home Equity Could Help If you've owned your home for a while, chances are it’s gone up in value. That increase—paired with what you’ve already paid down—is called home equity, and it’s one of the biggest financial advantages of owning property. Still, many Canadians don’t realize they can tap into that equity to improve their financial flexibility, fund major expenses, or support life goals—all without selling their home. Let’s break down what home equity is and how you might be able to use it to your advantage. First, What Is Home Equity? Home equity is the difference between what your home is worth and what you still owe on it. Example: If your home is valued at $700,000 and you owe $200,000 on your mortgage, you have $500,000 in equity . That’s real financial power—and depending on your situation, there are a few smart ways to access it. Option 1: Refinance Your Mortgage A traditional mortgage refinance is one of the most common ways to tap into your home’s equity. If you qualify, you can borrow up to 80% of your home’s appraised value , minus what you still owe. Example: Your home is worth $600,000 You owe $350,000 You can refinance up to $480,000 (80% of $600K) That gives you access to $130,000 in equity You’ll pay off your existing mortgage and take the difference as a lump sum, which you can use however you choose—renovations, investments, debt consolidation, or even a well-earned vacation. Even if your mortgage is fully paid off, you can still refinance and borrow against your home’s value. Option 2: Consider a Reverse Mortgage (Ages 55+) If you're 55 or older, a reverse mortgage could be a flexible way to access tax-free cash from your home—without needing to make monthly payments. You keep full ownership of your home, and the loan only becomes repayable when you sell, move out, or pass away. While you won’t be able to borrow as much as a conventional refinance (the exact amount depends on your age and property value), this option offers freedom and peace of mind—especially for retirees who are equity-rich but cash-flow tight. Reverse mortgage rates are typically a bit higher than traditional mortgages, but you won’t need to pass income or credit checks to qualify. Option 3: Open a Home Equity Line of Credit (HELOC) Think of a HELOC as a reusable credit line backed by your home. You get approved for a set amount, and only pay interest on what you actually use. Need $10,000 for a new roof? Use the line. Don’t need anything for six months? No payments required. HELOCs offer flexibility and low interest rates compared to personal loans or credit cards. But they can be harder to qualify for and typically require strong credit, stable income, and a solid debt ratio. Option 4: Get a Second Mortgage Let’s say you’re mid-term on your current mortgage and breaking it would mean hefty penalties. A second mortgage could be a temporary solution. It allows you to borrow a lump sum against your home’s equity, without touching your existing mortgage. Second mortgages usually come with higher interest rates and shorter terms, so they’re best suited for short-term needs like bridging a gap, paying off urgent debt, or funding a one-time project. So, What’s Right for You? There’s no one-size-fits-all solution. The right option depends on your financial goals, your current mortgage, your credit, and how much equity you have available. We’re here to walk you through your choices and help you find a strategy that works best for your situation. Ready to explore your options? Let’s talk about how your home’s equity could be working harder for you. No pressure, no obligation—just solid advice.

Smart Strategies to Save for Your Down Payment

By Tonia Jacobsen • September 3, 2025
How to Start Saving for a Down Payment (Without Overhauling Your Life) Let’s face it—saving money isn’t always easy. Life is expensive, and setting aside extra cash takes discipline and a clear plan. Whether your goal is to buy your first home or make a move to something new, building up a down payment is one of the biggest financial hurdles. The good news? You don’t have to do it alone—and it might be simpler than you think. Step 1: Know Your Numbers Before you can start saving, you need to know where you stand. That means getting clear on two things: how much money you bring in and how much of it is going out. Figure out your monthly income. Use your net (after-tax) income, not your gross. If you’re self-employed or your income fluctuates, take an average over the last few months. Don’t forget to include occasional income like tax returns, bonuses, or government benefits. Track your spending. Go through your last 2–3 months of bank and credit card statements. List out your regular bills (rent, phone, groceries), then your extras (dining out, subscriptions, impulse buys). You might be surprised where your money’s going. This part isn’t always fun—but it’s empowering. You can’t change what you don’t see. Step 2: Create a Plan That Works for You Once you have the full picture, it’s time to make a plan. The basic formula for saving is simple: Spend less than you earn. Save the difference. But in real life, it’s more about small adjustments than major sacrifices. Cut what doesn’t matter. Cancel unused subscriptions or set a dining-out limit. Automate your savings. Set up a separate “down payment” account and auto-transfer money on payday—even if it’s just $50. Find ways to boost your income. Can you pick up a side job, sell unused stuff, or ask for a raise? Consistency matters more than big chunks. Start small and build momentum. Step 3: Think Bigger Than Just Saving A lot of people assume saving for a down payment is the first—and only—step toward buying a home. But there’s more to it. When you apply for a mortgage, lenders look at: Your income Your debt Your credit score Your down payment That means even while you’re saving, you can (and should) be doing things like: Building your credit score Paying down high-interest debt Gathering documents for pre-approval That’s where we come in. Step 4: Get Advice Early Saving up for a home doesn’t have to be a solo mission. In fact, talking to a mortgage professional early in the process can help you avoid missteps and reach your goal faster. We can: Help you calculate how much you actually need to save Offer tips to strengthen your application while you save Explore alternate down payment options (like gifts or programs for first-time buyers) Build a step-by-step plan to get you mortgage-ready Ready to get serious about buying a home? We’d love to help you build a plan that fits your life—and your goals. Reach out anytime for a no-pressure conversation.