Bank of Canada Holds Rate at 2.75%: What Homeowners in BC Should Do Now

On April 16, 2025, the Bank of Canada (BoC) held its key policy rate at 2.75%, pausing its string of rate cuts after seven consecutive reductions. The decision reflects a cautious approach amidst persistent economic uncertainty, trade-related risks, and mixed inflation data.

For homeowners in Abbotsford, Surrey, and nearby areas, this announcement may seem uneventful on the surface. But in reality, the decision to hold rather than cut could significantly influence decisions around mortgage renewals, refinancing strategies, and rate selection in 2025.

Whether you’re approaching renewal or considering locking into a new term, now is a critical time to evaluate your mortgage strategy in the context of market trends, household budgets, and long-term goals.

What the BoC’s April 2025 Decision Signals

In its latest statement, the Bank of Canada emphasized that while inflation is expected to decline to 1.5% in April, largely due to lower oil prices and the removal of the federal carbon tax, it is waiting to see how U.S. tariffs and job market volatility unfold before adjusting rates further.

This policy stance sends two key messages:

1. Further rate cuts are possible—but not guaranteed.
2. The BoC is shifting from proactive easing to reactive observation.

For borrowers, this means the window to capitalize on rate cuts may narrow, and those with upcoming mortgage renewals need to assess whether to lock in now or stay flexible.

Mortgage Rate Trends: Fixed vs. Variable in April 2025

As of mid-April 2025, the following nationally available rates are being observed:

• 5-Year Fixed (insured): ~3.64%
• 5-Year Variable (insured): ~3.95%

While fixed rates have trended lower this year, they are beginning to stabilize, reflecting the BoC’s pause. Variable rates, however, remain sensitive to future moves and offer less short-term advantage than they did earlier in the year.

In Abbotsford and Surrey, where home prices are significantly above the national average, even modest rate shifts can make a noticeable difference in monthly payments—especially for families with higher mortgage balances.

Renewing Your Mortgage in 2025: Why Planning Early Matters

Over 1.2 million Canadian mortgages are set to renew in 2025, many of which originated during the ultra-low interest rate period of 2020–2021. Homeowners in Abbotsford and Surrey, in particular, are at the center of this renewal wave due to the pandemic-driven real estate boom.

If your mortgage is up for renewal this year, consider the following:

• Your new rate could be 2–3% higher than your previous one, increasing monthly payments by hundreds of dollars.
• A fixed-rate mortgage now offers payment certainty in an uncertain economy.
• A variable-rate mortgage could pay off if further cuts occur later in 2025—but carries short-term risk.

Start renewal discussions at least 4 months in advance to compare offers, negotiate terms, and explore your porting and refinancing options.

Should You Refinance in a Holding Pattern Market?

If you locked into a higher rate in late 2023 or early 2024, you may be wondering whether now is a good time to refinance. While fixed rates have dropped slightly, the benefits of refinancing depend on several factors:

Refinancing might make sense if:

• Your current rate is significantly above 4.5%
• You plan to stay in the home for another 5+ years
• You want to access home equity for renovations or debt consolidation
• You’re facing financial pressure and want to extend amortization to lower payments

However, if your penalty for breaking a fixed mortgage is high—or if your rate is already in the low 4% range—waiting for another BoC cut may be more cost-effective.

A local mortgage professional can help calculate the penalty vs. savings trade-off and identify whether refinancing is in your best interest.

Rate Selection Strategy in a Transitional Economy

Here’s how homeowners and buyers in Abbotsford, Surrey, and nearby areas might approach rate selection in April 2025:

1. For Renewing Borrowers:

• Consider a short-term fixed rate (1–3 years) to ride out uncertainty while keeping predictable payments.
• If you can handle some risk, a variable rate may pay off later in the year, especially if more cuts are introduced.

2. For First-Time Buyers:

• Opting for a 5-year fixed could simplify budgeting during the first years of homeownership.
• Consider split or hybrid mortgages to combine security with rate responsiveness.

3. For Refinancers:

• If you’re consolidating debt or managing cash flow, prioritize payment flexibility and amortization control over chasing the lowest headline rate.
• If your penalty is low, refinancing into a lower fixed rate now could save thousands over the next term.

Local Considerations: Abbotsford vs. Surrey

Mortgage strategy isn’t just about rates—it’s also about property values, income levels, and homeownership timelines.

Abbotsford

• Lower average home prices than Metro Vancouver
• More flexibility for younger or mid-income households
• Often more room to extend amortization or adjust terms affordably

Surrey

• Higher average property values mean larger mortgage balances
• Strong population growth and development pressure
• Short-term rate shifts have a bigger impact on monthly affordability

In both cases, early planning and local market knowledge can reduce renewal stress and improve financial outcomes.

How Different Borrowers Can Respond in 2025

The Bank of Canada’s decision to pause rate cuts at 2.75% presents both opportunity and uncertainty for different types of homeowners and buyers. Here’s how several borrower profiles in Abbotsford, Surrey, and surrounding areas might navigate their options this spring.

1. First-Time Homebuyers

Buyers entering the market for the first time should focus on stability and qualification. Even though interest rates are lower than last year, affordability remains stretched.

Recommended Approach:

• Consider a 5-year fixed rate to lock in stability as you adapt to monthly housing costs.
• Work with a mortgage advisor to determine eligibility for first-time buyer programs or lower down payment insured options.

2. Homeowners Facing Renewal

Many homeowners who bought between 2020 and 2022 will be facing renewals this year—often with a sizable jump in monthly payments.

Recommended Approach:

• Begin the renewal process early and compare both fixed and variable rate options.
• If you expect rates to fall later in 2025, consider a short-term fixed or variable rate.
• Evaluate whether refinancing with a new amortization can improve cash flow.

3. Borrowers with Multiple Properties

Real estate investors and landlords in Surrey and Langley should focus on cash flow optimization and break penalties when reviewing their mortgage strategy.

Recommended Approach:

• Use a mix of fixed and variable rates across different properties to diversify risk.
• Reassess rental income against projected mortgage payments before making new investments.

4. Self-Employed or Contract Workers

For those with variable income, the risk of rate volatility is amplified. Budget consistency and liquidity matter more than rate speculation.

Recommended Approach:

• Choose a fixed rate unless your income stream can comfortably absorb payment fluctuations.
• Ensure documentation is in place for income verification if you’re refinancing or switching lenders.

Frequently Asked Questions (FAQs)

Q1: Why did the Bank of Canada pause rate cuts?
The Bank is assessing the economic impact of trade disruptions and inflation trends. Though inflation dropped to 2.3% in March and is expected to hit 1.5% in April, the BoC is cautious due to recent job losses and global uncertainty.

Q2: What happens if rates stay flat for the rest of 2025?
If rates remain at 2.75%, mortgage rates are likely to stabilize, particularly for fixed terms. This benefits borrowers looking to lock in security without facing higher costs.

Q3: Will variable rates go down later this year?
Many economists expect at least one more rate cut in 2025. If that happens, variable-rate mortgages could become more attractive, but there’s no guarantee. Staying in touch with a mortgage professional is key.

Q4: Is it too early to renew my mortgage if it’s due in late 2025?
No. Lenders allow you to renew as early as 120–180 days before the end of your term. In fact, early renewal may help you lock in today’s lower fixed rates.

Q5: What should I ask my lender or broker during a review?

• What’s my penalty to break the mortgage?
• What are today’s best fixed and variable offers?
• Can I increase my amortization to reduce monthly payments?
• Are there cashback or rate buy-down options?

Q6: Should I wait to refinance?
Only if your current mortgage rate is already competitive or your penalty is too high. If your rate is above 4.75% and you plan to stay in your home for years, refinancing could offer significant savings, even with a modest fee.

Q7: Will home prices fall if rates stay high?
Not necessarily. While higher rates typically slow price growth, housing supply in the Fraser Valley remains low. Price declines are more likely in overheated markets, not in growing regions with strong demand like Surrey and Abbotsford.

Final Thoughts: Your Next Steps

For homeowners and buyers in Abbotsford, Surrey, and nearby communities, the Bank of Canada’s latest decision is a call to reassess your mortgage strategy—not to panic, but to plan.

This pause in rate cuts doesn’t mean opportunity is gone. In fact, it may be the ideal moment to:

• Lock in competitive fixed rates before future volatility returns
• Revisit your budget to prepare for upcoming renewal costs
• Consult a mortgage advisor to compare refinancing vs. early renewal
• Explore hybrid or shorter-term fixed options if flexibility is a priority

The key is to act with information, not assumption. With the right planning and expert guidance, you can make confident mortgage decisions in 2025—even as the market remains uncertain.