First-Time Home Buyer Mortgages & Trump’s Tariffs Impact

Trump’s 25% tariffs on Canadian imports are adding new challenges to the Canadian economy, directly affecting First-Time Home Buyer Mortgages. With the Bank of Canada (BoC) cutting interest rates six times, mortgage rates are shifting, creating both opportunities and risks for homebuyers.

For those searching for the best mortgage rates in Surrey, the uncertainty around tariffs, inflation, and interest rates means timing your mortgage decision is crucial. Should you lock in a fixed rate or opt for a variable mortgage? And how are Mortgage Brokers in Surrey helping buyers navigate these changes? Let’s break it down.

1. Trump’s Tariffs & Their Effect on Canada’s Economy

Trump’s tariff threats caused market panic, leading to a drop in bond yields, which influence fixed mortgage rates. Key economic effects include:

  • The five-year Government of Canada bond yield dropped by 20 basis points after Trump’s tariff announcement, hitting its lowest level since April 2022.
  • Investors pulled out of stocks and moved to bonds, signaling fears of a Canadian recession.
  • The Canadian dollar weakened, making imports more expensive and driving inflation risks.

The Bank of Canada reacted by cutting its policy rate to 3.0%, with experts predicting further rate cuts if tariffs take full effect.





2. How First-Time Home Buyer Mortgages Are Being Affected

Fixed Mortgage Rates: Lower, But Volatile

Fixed mortgage rates are tied to bond yields, which have been fluctuating due to market uncertainty.

  • Some lenders have already lowered their fixed mortgage rates following the bond yield drop.
  • The lowest five-year fixed mortgage rate is now around 3.89% for insured mortgages.
  • However, Canada’s major banks have been slow to adjust rates, waiting for more economic clarity.

For first-time home buyers looking for the best mortgage rates in Surrey, it’s crucial to lock in a rate hold now before conditions change.

Variable Mortgage Rates: More Cuts Could Come

Variable mortgage rates are linked to the Bank of Canada’s policy rate, which has already been cut six times.

  • If Trump enforces tariffs fully, BMO predicts another 1.0% in rate cuts this year.
  • This means variable mortgage rates could continue dropping, offering lower monthly payments for homeowners.
  • The spread between fixed and variable rates is narrowing, making variable mortgages a viable option for those comfortable with some risk.

3. Should First-Time Home Buyers Lock in a Fixed or Variable Rate?

For First-Time Home Buyer Mortgages

  • Lock in a rate hold for up to 120 days to protect against sudden increases.
  • Compare fixed vs. variable rates—if rate cuts continue, variable mortgages may offer more savings.
  • Work with Mortgage Brokers in Surrey to find lenders offering the best mortgage rates in Surrey before banks adjust pricing.

For Homeowners Renewing or Refinancing

  • If your fixed mortgage rate is above 5%, refinancing now could save thousands in interest.
  • Those with variable-rate mortgages could see additional payment relief if the BoC continues rate cuts.
  • Consider home equity loans or refinancing while rates are still falling.

4. Will Mortgage Rates Keep Dropping in 2025?

Factors That Could Lower Rates Further:

✔️ More BoC rate cuts to counteract a slowing economy
✔️ Weaker bond yields, further reducing fixed mortgage rates
✔️ Cooling inflation, allowing more aggressive rate reductions

Factors That Could Push Rates Back Up:

❌ If Trump cancels tariffs, bond yields could rebound, reversing mortgage rate drops
❌ If inflation remains high, the BoC may pause further rate cuts
❌ If global trade stabilizes, fixed mortgage rates may increase

For first-time home buyers, this uncertainty makes it even more important to work with experienced Mortgage Brokers in Surrey to secure the right mortgage at the best rate.

Final Thoughts: Take Action Now to Secure the Best Mortgage Rates in Surrey

Trump’s tariffs are creating both risks and opportunities in Canada’s mortgage market. While fixed mortgage rates are declining, they remain volatile, and further BoC rate cuts could drive variable rates even lower.

For first-time home buyers or those looking to refinance, now is the time to:
✔️ Lock in a mortgage rate hold before market conditions change
✔️ Consider a variable-rate mortgage if further BoC rate cuts are expected
✔️ Work with Mortgage Brokers in Surrey to access the best mortgage rates in Surrey

At Satbir Bhullar Mortgages, we specialize in helping first-time home buyers and homeowners secure the most competitive mortgage rates.

Apply for a Mortgage | Mortgage Calculators | Cities We Serve | Contact Us

Looking for First-Time Home Buyer Mortgages or the best mortgage rates in Surrey? Contact us today for expert guidance!

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