Mortgage Rate War 2025: How Lenders Are Cutting Rates
Canada’s mortgage market is heating up in 2025 as a result of falling bond yields and seven consecutive Bank of Canada rate cuts. These changes have led to lower borrowing costs — and a new level of competition among major lenders. For borrowers, the rate war brings both opportunity and complexity. Understanding how lenders are responding and how to navigate this environment is essential, especially for buyers and homeowners in regions like Abbotsford, Surrey , and the surrounding areas. Mortgage Rate Trends: What’s Behind the Decline? The recent drop in Government of Canada bond yields , particularly the 5-year yield, has been the key driver of lower fixed mortgage rates . These yields are influenced by: Economic uncertainty tied to global trade tensions. A surge in investor demand for safe-haven assets like Canadian bonds. Slower growth projections prompting the Bank of Canada to ease monetary policy. At the same time, the central bank has reduced its overnight lending rate to 2.75% ...
