August 2025 Mortgage Market Update: What You Need to Know Before Fall
The August 2025 Mortgage Market Update at a Glance
As of July 30, the Bank of Canada held its key interest rate at 2.75% (for the third straight time).
This rate hold was expected by most major banks and reflects ongoing uncertainty in the economy. Inflation has settled near the BoC’s 2% target, but trade tensions (especially between Canada and the U.S.) continue to cloud the outlook.
Even so, many Canadians are still buying homes, refinancing, or preparing for fall renewals.
What the Big Banks Are Predicting Next
Source: Canadian Mortgage Trends. Bank of Canada rate forecasts for 2025 from RBC, Scotiabank, BMO, TD
Here’s what major Canadian banks now forecast for interest rates going forward (source: Canadian Mortgage Trends):
RBC: No more rate cuts in 2025
Scotiabank: One more cut, ending 2025 at 2.50%
BMO: Most optimistic—2.00% by early 2026
TD, CIBC, National: Aiming for a 2.25% terminal rate
👉 But remember: Predictions vary. Your mortgage strategy shouldn’t be built on forecasts, but rather built around your personal goals and financial situation.
Why Now Is the Time to Check In on Your Mortgage Strategy
Financial Pressure Is Building
August is one of the most expensive months for Canadian households:
Back-to-school costs
Utility bills
Property tax due dates
End-of-summer expenses
If you’re feeling the strain, a mortgage check-in could give you breathing room (whether through mortgage refinancing or adjusting your current payment structure).
Refinancing Isn’t as Risky as You Think
There’s a common misconception that refinancing hurts your credit. The truth?
✅ When used strategically, a refinance can:
Improve your credit score over time by reducing debt utilization
Increase monthly cash flow
Replace high-interest debt with a lower-rate mortgage
Unlock funds for renovations, investments, or major expenses
Even with a penalty, the long-term savings often make it worth it.
Alternative Lending Is a Tool, Not a Downgrade
If You’ve Been Declined by a Bank, You Still Have Options
Not everyone fits into the “A lender” box.
Self-employed? Rebuilding credit? Have a non-traditional income stream?
Alternative lenders specialize in exactly these situations. And many Canadians use them for 1–3 years before returning to traditional mortgage options.
The key is to act early, before your situation becomes more difficult to navigate.
A Quick Note for First-Time Home Buyers
If you’re looking to get into the market before fall, here are a few tools you can use:
✅ First Home Savings Account (FHSA)
✅ RRSP Home Buyers’ Plan
✅ Pre-approval for stronger offers
✅ Down payment from equity (if you’re getting help from family)
Let’s make sure you’re positioned clearly before listings pick up again in September.
Final Takeaway: Don’t Wait for the Headlines to Be Perfect
Whether you’re thinking of buying, refinancing, or simply renewing in the next 6–12 months, this is your reminder:
📌 You don’t need perfect timing. You just need a plan.
Markets will always fluctuate. But your personal mortgage strategy can help you stay ahead of change, not chase it.
