Mortgage Blog

2025 Mortgage Rate Forecast in Montreal & Quebec — What Homebuyers Should Know

October 6, 2025 | Posted by: Yelena Markus

On September 17, 2025, the Bank of Canada (BoC) announced another rate cut, lowering its policy rate to 2.50%. This move aims to stimulate economic growth and make borrowing more affordable after several years of higher interest rates.

Because the effects of rate changes often take 12 to 18 months to filter through the economy, we’re only beginning to see how this policy will affect mortgages, inflation, and home affordability across Montreal and Quebec.

In the next two years, about 60% of mortgages in Canada will come up for renewal. Many homeowners will face higher payments than they did before the 2022 rate hikes — but there’s good news ahead: rates are finally trending down.

Key Takeaways

• Current prime rate: 4.70%

• Inflation: 1.9% (within the BoC’s target range)

• Forecast: Gradual rate cuts through 2025

• Best fixed mortgage rates (Quebec average): Around 4.0%–4.2%

• Best variable mortgage rates: Around 3.8%–4.0%

Mortgage Rate Forecast for 2025: Gradual Decreases Ahead

According to major Canadian banks, interest rates are expected to continue falling gradually throughout 2025.
Most forecasts predict 25-basis-point reductions in the upcoming policy announcements, possibly bringing the policy rate to around 2.25% by year-end.

Here’s what the Big 6 Banks are projecting:

Data as of October 2025.

As a Montreal mortgage broker, I’m already seeing lenders offering more competitive rates, especially for borrowers with stable income and strong credit.

What This Means for Montreal Buyers and Homeowners

If you’re planning to buy a home or renew your mortgage in 2025, these lower rates are a welcome relief.

• For first-time buyers: Lower rates can improve affordability and qualifying power.

• For renewals: You may still face higher payments compared to pre-2022 rates, but smaller than expected increases.

• For refinances: Now is a good time to explore consolidating debt or accessing equity before rates shift again.

If your mortgage is coming up for renewal in 2025 or 2026, planning early with a trusted mortgage broker in Montreal like Yelena Markus can help you secure the most favourable options.

Long-Term Outlook: 2026 and Beyond

The BoC’s goal is to keep inflation steady around 2% while supporting economic growth.
Forecasts for 2026 show policy rates stabilizing between 2.00% and 2.50%, depending on the bank.

This stability will likely boost home sales and buyer confidence across Quebec and Greater Montreal, where many buyers had been waiting for clearer signals from the market.

With strong population growth and a limited housing supply, Montreal’s real estate market could see renewed demand as borrowing costs ease.

Why Are Interest Rates Going Down?

Several factors are contributing to this downward trend:

1. Slower economic growth — Canada’s economy is growing modestly, prompting the BoC to make borrowing easier.

2. Cooling inflation — Inflation dropped below 2%, reducing pressure to keep rates high.

3. Higher unemployment — A slight increase in unemployment signals less overheating, allowing rate cuts.

4. Global conditions — Slower U.S. growth and trade challenges have encouraged the BoC to support Canadian consumers and businesses.

Tips for Borrowers in 2025

1. Reassess Your Financial Plan

Even with falling rates, it’s smart to evaluate your income stability, debt levels, and savings before locking in a term.

2. Consider a Shorter Fixed Term

If you believe rates will keep falling, a shorter fixed term (2–3 years) allows flexibility to renew at a lower rate later.

3. Variable Rate vs. Fixed Rate

Variable-rate mortgages can save you money if rates continue to decline. But if you prefer predictable payments, fixed-rate options provide peace of mind — and rates are now much lower than last year.

4. Work With a Local Expert

Banks often promote their own products. As an independent mortgage broker in Montreal, I shop the market to find you the best mortgage rate and term for your situation — not just one lender’s offer.

What Could Still Affect Future Rates

While forecasts look positive, several factors can influence where rates go next:

• Global oil prices and trade disruptions

• Inflationary pressure from housing or energy

• Unemployment trends

• U.S. Federal Reserve policy decisions

These elements can cause temporary fluctuations, but the overall trend for 2025–2026 remains favourable for borrowers.

Should You Buy or Refinance Now?

If you’ve been waiting for the “right time” to buy, 2025 could be your window of opportunity.
As rates decline, home prices in Montreal may begin rising again — meaning waiting too long could reduce your purchasing power.

If you already own a home, refinancing could help:

• Lower your payment

• Consolidate high-interest debt

• Free up cash for renovations or investments

Every situation is unique, so it’s best to discuss your goals with a mortgage broker who understands the Montreal market and can guide you through today’s complex rate environment.

Final Thoughts

Mortgage rates will always move up and down — what matters most is having a clear plan and guidance from an expert who understands both the numbers and your needs.

At Yelena Markus Mortgage Broker, I help Montreal and Quebec homeowners and buyers:

• Secure the best possible mortgage rates

• Understand fixed vs variable options

• Prepare for renewals and refinances

• Navigate pre-approvals with confidence

If you’re buying, renewing, or refinancing, I’ll help you make an informed, confident decision — not just chase a rate.

Let’s Talk About Your Mortgage Strategy

Whether you’re a first-time buyer, homeowner, or investor, I can help you find the best mortgage rates in Montreal and Quebec for your unique goals.

Book a free consultation today and explore your mortgage options with Yelena Markus Mortgage Broker.

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