Bank of Canada Rate Announcement Sept 17th, 2025

Tonia Jacobsen • September 17, 2025

Bank of Canada lowers policy rate to 2½%.



FOR IMMEDIATE RELEASE

Media Relations

Ottawa, Ontario

September 17, 2025


The Bank of Canada today reduced its target for the overnight rate by 25 basis points to 2.5%, with the Bank Rate at 2.75% and the deposit rate at 2.45%.


After remaining resilient to sharply higher US tariffs and ongoing uncertainty, global economic growth is showing signs of slowing. In the United States, business investment has been strong but consumers are cautious and employment gains have slowed. US inflation has picked up in recent months as businesses appear to be passing on some tariff costs to consumer prices. Growth in the euro area has moderated as US tariffs affect trade. China’s economy held up in the first half of the year but growth appears to be softening as investment weakens. Global oil prices are close to their levels assumed in the July Monetary Policy Report (MPR). Financial conditions have eased further, with higher equity prices and lower bond yields. Canada’s exchange rate has been stable relative to the US dollar.


Canada’s GDP declined by about 1½% in the second quarter, as expected, with tariffs and trade uncertainty weighing heavily on economic activity. Exports fell by 27% in the second quarter, a sharp reversal from first-quarter gains when companies were rushing orders to get ahead of tariffs. Business investment also declined in the second quarter. Consumption and housing activity both grew at a healthy pace. In the months ahead, slow population growth and the weakness in the labour market will likely weigh on household spending.


Employment has declined in the past two months since the Bank’s July MPR was published. Job losses have largely been concentrated in trade-sensitive sectors, while employment growth in the rest of the economy has slowed, reflecting weak hiring intentions. The unemployment rate has moved up since March, hitting 7.1% in August, and wage growth has continued to ease.


CPI inflation was 1.9% in August, the same as at the time of the July MPR. Excluding taxes, inflation was 2.4%. Preferred measures of core inflation have been around 3% in recent months, but on a monthly basis the upward momentum seen earlier this year has dissipated. A broader range of indicators, including alternative measures of core inflation and the distribution of price changes across CPI components, continue to suggest underlying inflation is running around 2½%. The federal government’s recent decision to remove most retaliatory tariffs on imported goods from the US will mean less upward pressure on the prices of these goods going forward.


With a weaker economy and less upside risk to inflation, Governing Council judged that a reduction in the policy rate was appropriate to better balance the risks. Looking ahead, the disruptive effects of shifts in trade will continue to add costs even as they weigh on economic activity. Governing Council is proceeding carefully, with particular attention to the risks and uncertainties. Governing Council will be assessing how exports evolve in the face of US tariffs and changing trade relationships; how much this spills over into business investment, employment, and household spending; how the cost effects of trade disruptions and reconfigured supply chains are passed on to consumer prices; and how inflation expectations evolve. 


The Bank is focused on ensuring that Canadians continue to have confidence in price stability through this period of global upheaval. We will support economic growth while ensuring inflation remains well controlled.


Information note

The next scheduled date for announcing the overnight rate target is October 29, 2025. The Bank’s October Monetary Policy Report will be released at the same time.


Tonia Jacobsen

Mortgage Expert

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What Is a Cashback Mortgage and How Does It Work?

By Tonia Jacobsen • February 18, 2026
Cashback Mortgages: Are They Worth It? Here’s What You Need to Know If you’ve been exploring mortgage options and come across the term cashback mortgage , you might be wondering what exactly it means—and whether it’s a smart move. Let’s break it down in simple terms. What Is a Cashback Mortgage? A cashback mortgage is just like a regular mortgage—but with one extra feature: you receive a lump sum of cash when the mortgage closes . This cash is typically: A fixed amount , or A percentage of the total mortgage , usually between 1% and 7% , depending on your mortgage term and lender. The money is tax-free and paid directly to you on closing day. What Can You Use the Cashback For? There are no restrictions on how you use the funds. Here are some common uses: Covering closing costs Buying new furniture Renovations or home upgrades Paying off high-interest debt Boosting your cashflow during a tight transition Whether it’s to help you settle in or catch up financially, cashback can offer a helpful buffer— but it comes at a cost . The True Cost of a Cashback Mortgage Here’s the part many people overlook: cashback mortgages come with higher interest rates than standard mortgages. Why? Because the lender is essentially advancing you a small loan upfront—and they’re going to make that money back (and then some) through your mortgage payments. So while the upfront cash feels like a bonus, you’ll pay more in interest over time to have that convenience. Breaking Down the Numbers It’s hard to give a blanket answer about how much more you’ll pay since it depends on: Your interest rate The cashback amount The mortgage term Your payment schedule This is why it’s important to run the numbers with a mortgage professional who can help you compare this option with others based on your personal financial situation. Are You Eligible for a Cashback Mortgage? Not everyone qualifies. Cashback mortgages generally come with stricter requirements . Lenders often want to see: Excellent credit history Strong, stable income Low debt-to-income ratio If your mortgage file includes anything “outside the box”—like being self-employed or recently changing jobs—qualifying for a cashback mortgage might be tough. What If You Need to Break the Mortgage? This is one of the biggest risks with cashback mortgages. If your circumstances change and you need to break your mortgage early, you could be on the hook for: Paying back some or all of the cashback you received, and A prepayment penalty (typically the interest rate differential or 3 months’ interest—whichever is higher) That can be a very expensive combination. So if there’s even a chance you might need to sell, refinance, or move before your term is up, a cashback mortgage might not be the best fit. Should You Consider a Cashback Mortgage? Maybe—but only with eyes wide open. Cashback mortgages can be helpful in the right scenario, but they’re not free money. They’re a lending tool that benefits the lender , and the key is knowing exactly what you’re agreeing to. Final Thoughts: Talk to an Expert First Choosing the right mortgage isn’t just about the lowest rate or the biggest perk—it’s about making a choice that fits your whole financial picture. If you’re considering a cashback mortgage, or just want to explore all your options, let’s talk. As an independent mortgage professional , I can help you weigh the pros and cons of various products, so you can make a confident, informed decision. Have questions? I’d be happy to help—reach out anytime.

How to Get a Mortgage for a Second Property

By Tonia Jacobsen • February 11, 2026
Thinking About Buying a Second Property? Here’s What to Know Buying a second property is an exciting milestone—but it’s also a big financial decision that deserves thoughtful planning. Whether you're dreaming of a vacation retreat, building a rental portfolio, or looking to support a family member with a place to live, there are plenty of reasons to consider a second home. But before you jump in, it's important to understand the strategy and steps involved. Start with “Why” The best place to begin? Clarify your motivation. Ask yourself: Why do I want to buy a second property? What role will it play in my life or finances? How does this fit into my long-term goals? Whether your focus is lifestyle, income, or legacy planning, knowing your “why” will help you make smarter decisions from the start. Talk to a Mortgage Expert Early Once you’ve nailed down your goals, the next step is to sit down with an independent mortgage professional. Why? Because buying a second property isn't quite the same as buying your first. Even if you’ve qualified before, financing a second home has unique considerations—especially when it comes to down payments, debt ratios, and how lenders assess risk. How Much Do You Need for a Down Payment? Here’s where the purpose of the property really matters: Owner-occupied or family use: You may qualify with as little as 5–10% down, depending on the property and lender. Income property: Expect to put down 20–35%, especially for short-term rentals or if it won’t be occupied by you or a family member. Your down payment amount can be one of the biggest hurdles—but with strategic planning, it’s often manageable. Ways to Fund the Down Payment If you don’t have the full amount in cash, you might be able to tap into your current home’s equity to help fund the purchase. Here are a few ways to do that: ✅ Refinance your existing mortgage to access additional funds ✅ Secure a second mortgage behind your current one ✅ Open a HELOC (Home Equity Line of Credit) ✅ Use a reverse mortgage (in certain age-qualified scenarios) ✅ Take out a new mortgage if your current home is mortgage-free These options depend on your income, credit, home value, and overall financial picture—another reason why having a pro in your corner matters. Second Property Strategy: It’s More Than Just Numbers This purchase should be part of a bigger financial plan—one that balances risk and reward. It’s about: Assessing your full financial health Maximizing your existing assets Minimizing your cost of borrowing Aligning your purchase with your long-term goals Ready to Take the Next Step? There’s no one-size-fits-all answer when it comes to buying a second property. That’s why it helps to talk things through with someone who understands both the big picture and the small details. If you’re ready to explore your options and build a plan to make that second property dream a reality, let’s connect. I’d love to help you take the next step with confidence.