The Bank of Canada has initiated interest rate cuts, shifting the mortgage market outlook for 2025. As borrowing costs drop and fixed-rate loans come up for renewal, Canadian banks are expected to engage in a mortgage competition, following a year of subdued loan growth.
The Bank of Canada started slashing interest rates in June, after ratcheting them up for years to tamper inflation, which could shift the mortgage market outlook for 2025.could prod Canadian banks into a mortgage competition next year as the cost of borrowing drops and swaths of fixed-rate loans come up for renewal.
“The Bank of Canada’s attempts to ‘stick the landing’ with its easing monetary policy stance of four straight rate cuts in as many meetings, including the recent jumbo 50 basis point rate cut in late October, could reignite Canada’s sluggish housing market, spur consumer and business lending, and fuel capital markets underwriting and advisory activity,” Jefferies analyst John Aiken said in a note.
Analyst expectations are wide-ranging for the fourth quarter, estimating that earnings could grow between 4 per cent to 11 per cent on average.
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