November 17, 2025 · · 3 min read

Will Canadian Interest Rates Drop Again in 2025?

What Homeowners Should Prepare For (November 2025 Update)

As of November 17th, 2025, Canadians are waiting on one final Bank of Canada announcement before the end of the year — and many homeowners are wondering:

“Will interest rates drop again, and should I wait before renewing or locking in?”

Here’s what you need to know right now, based on the latest 2025 market conditions.

Where Rates Stand Today (Late 2025)

Throughout 2025, the Bank of Canada has been cutting rates slowly — typically 0.25% at a time — as inflation cooled and the economy softened.

Right now:

Rates are lower than they were in early 2024
But they remain significantly higher than the COVID-era lows
Economists expect at least one more cut, either in the final 2025 announcement or early 2026
The last announcement for 2025 is set for December 10

Most forecasts show cautious, gradual reductions — not aggressive rate slashing.

Why Rate Cuts Are Still Slow

Even though inflation has settled closer to the target range, the Bank is moving carefully because:

1. Inflation is improving, but not “stable” enough

The Bank wants consistent 2% readings for several months before cutting faster.

2. The economy is cooling, but holding

Slower growth and higher debt loads justify cuts — but not drastic ones.

3. Housing market risk remains

A sudden drop could reignite bidding wars across major cities, which policymakers want to avoid.

What This Means for Your 2025–2026 Mortgage Renewal:

If your renewal is coming up in the next 6–9 months

Expect to renew at a higher rate compared to your COVID mortgage, even if one more cut happens.

If your renewal is late 2026 or 2027

You may see more noticeable relief, but not a return to ultra-low rates.

If you’re already in a variable rate

Every 0.25% cut lowers your payment or shortens your amortization slightly.

The key is understanding how much a small change affects your budget, which surprises most homeowners. Click here to calculate the difference if interest rates dropped by 0.25%

Should You Lock In Now or Wait? (Late 2025 Guide)

Lock in now if you:

Prefer stable, predictable payments
Have tight monthly cash flow
Want to avoid the risk of rates rising again in 2026

Consider waiting or going variable if you:

Expect more rate cuts in 2026
Like flexibility
Want to catch future payment drops

Right now, many Canadians are choosing shorter-term fixed rates (1–3 years) or variable rates (some lenders provide the option to convert to fixed mortgages mid-term if interest rates start changing) to stay flexible.

What Homeowners Should Do Before the Final 2025 Announcement

1. Run your renewal numbers early

Many homeowners get shocked by how much their payment will increase.

Use the Mortgage Renewal Calculator to compare scenarios.

2. Look at debt consolidation options

With today’s high interest rates on credit cards and personal loans, renewal time is often a smart point to:

Roll high-interest debt into the mortgage
Reduce monthly payments
Improve cash flow heading into 2026

Run this through the Debt Consolidation Calculator to see if it's worth it.

3. Compare multiple rate scenarios for 2026

Even small differences in timing can save thousands.

Evaluate:

1-year fixed
2-year fixed
Variable
Hybrid approaches

This is especially important with one Bank of Canada announcement still left this year.