The Bank of Canada has cut its key interest rate for the second time in a row, lowering it to 2.25%. This move could bring some financial relief to people in Saint John with variable-rate mortgages and other loans tied to the prime rate.

The decision, announced on October 29, 2025, comes as the Canadian economy shows signs of slowing down. According to a news release from the Canadian Real Estate Association (CREA), Canada’s economy shrank by 1.6% in the second quarter of 2025, largely because of a decrease in exports and business investment.

Why Did the Bank Cut Rates?

The central bank is responding to several economic pressures. The national job market has seen losses, hiring has been slow, and the unemployment rate is at its highest point in over four years. While inflation has remained within the Bank’s target range of 1% to 3%, economic growth is expected to remain weak for the rest of the year.

The Bank of Canada aims to make borrowing cheaper to encourage spending and investment, which helps stimulate the economy during a slowdown.

What This Means for Saint John Residents

If you are a homeowner in Saint John with a variable-rate mortgage or a home equity line of credit (HELOC), you will likely see your interest payments decrease. This change should free up some cash in your monthly budget. Commercial banks typically lower their prime lending rates shortly after the Bank of Canada announces a cut.

For potential homebuyers, this rate cut makes it more affordable to borrow money. Lower interest rates can increase your purchasing power, which is welcome news in a housing market where affordability remains a challenge. The CREA report notes that while housing resales have increased, growth is still limited by affordability issues across the country.

What to Expect Next

Don’t expect another cut right away. The Bank of Canada has indicated that it plans to hold the rate at 2.25% for the time being, as long as the economy performs as expected. This suggests a period of stability before any further changes.

The next scheduled interest rate announcement is on December 10, 2025.

Frequently Asked Questions

What is the Bank of Canada’s new policy interest rate?

The new policy interest rate is 2.25%, following a recent cut.

How does this rate cut affect my fixed-rate mortgage?

This rate cut does not directly affect fixed-rate mortgages. Those rates are locked in for the term of your mortgage. However, it may lead to lower offers for new fixed-rate mortgages or renewals in the future.

Will my variable-rate mortgage payments go down automatically?

It depends on your lender and the terms of your mortgage. Most variable-rate mortgage payments will decrease, but you should confirm the details with your financial institution.

Is now a good time to buy a home in Saint John?

Lower borrowing costs can make buying a home more attractive. However, your decision should also be based on your personal financial situation, the local housing market conditions, and long-term goals. It’s always best to consult with a financial advisor and a real estate professional.