Timing is everything in real estate, and interest rates play a key role in determining when it’s the right moment to make a move. With Calgary’s home prices among the most affordable in Canada and interest rates forecasted to decline, 2025 is shaping up to be a golden opportunity for buyers.
The Bank of Canada’s policy interest rate is currently at 3.75% and is expected to decrease further. Mortgage rates, now averaging 4.99% for a 5-year fixed term, are projected to remain stable or dip slightly, enhancing affordability for buyers.
For those ready to act, Cedarglen Living offers thoughtfully designed homes in vibrant Calgary communities. From first-time buyers to those upgrading, Cedarglen Living combines quality craftsmanship with affordability, making them the perfect partner for navigating this promising market.
Understanding the Impact of Interest Rates on Home Buying
Interest rates directly affect the affordability of a home by determining the cost of borrowing. Here’s how:
- Lower Interest Rates Mean Lower Monthly Payments: Even a small reduction in rates can significantly decrease mortgage costs, making homeownership more accessible.
- Higher Borrowing Power: Favorable rates let buyers stretch their budgets, enabling them to afford larger or higher-quality homes.
- Market Demand: Lower rates often spark increased activity in the housing market, creating a vibrant environment for buyers.
With mortgage rates averaging 4.99%, the possibility of further reductions in 2025 is exciting news.
Forecasted Interest Rates for 2025: What Experts Predict
Economists and financial experts are forecasting a stable or slightly declining interest rate environment heading into 2025. Here’s what we know:
- Current Trends: The Bank of Canada’s policy rate of 3.75% reflects a series of cuts in 2024 aimed at supporting economic growth and controlling inflation.
- 2025 Projections: The Bank of Canada has recently reduced its policy interest rate to 3.25%. Analysts predict the rate could fall further, potentially reaching 3% by the end of 2025. This would likely result in 5-year fixed mortgage rates stabilizing between 4.05% and 4.1%.
- What This Means for Calgary Buyers: Lower borrowing costs could make it easier for buyers to enter the market or upgrade their living situations.
These forecasts align with broader trends of market stabilization and affordability, creating ideal conditions for homebuyers.
Why 2025 Will Be a Great Time to Buy in Calgary
Calgary’s real estate market offers unique advantages that make it particularly attractive during periods of favourable interest rates:
- Market Stability: Calgary’s housing market is balanced, avoiding the extreme fluctuations seen in Toronto or Vancouver.
- Affordable Prices: Calgary remains one of Canada’s most affordable major cities for real estate, with median home prices well below the national average.
- Economic Growth: The city’s economic diversification into tech, healthcare, and renewable energy is driving job creation and population growth, bolstering housing demand.
- Interest Rate Opportunity: With forecasted lower rates paired with Calgary’s affordability, buyers have a rare chance to secure homes with manageable payments.
Benefits of Acting in 2025
If you’re contemplating buying a home, 2025 could be a pivotal year. Here’s why:
- Build Equity Sooner: Locking in a favorable mortgage rate lets buyers start building equity faster, positioning themselves for long-term financial growth.
- Secure Low Borrowing Costs: With rates expected to increase in the future, acting in 2025 allows buyers to lock in lower costs now.
- Strong Investment Potential: Calgary’s real estate market is poised for steady growth, offering buyers a chance to invest in a city with high economic and lifestyle appeal.
Tips for Buyers Preparing for 2025
Maximizing the opportunity of 2025 requires preparation. Here’s how to get started:
- Improve Your Credit Score: Begin working on your credit profile now to ensure you qualify for the best mortgage rates.
- Save for a Down Payment: The more you can put down, the less you’ll need to borrow—and the better your mortgage terms will be.
- Research Calgary Neighbourhoods: Explore communities that fit your lifestyle, from vibrant downtown condos to family-friendly suburban developments.
- Work with Trusted Professionals: Partner with a knowledgeable real estate builder like Cedarglen Living to guide you through the buying process.
Conclusion
Forecasted interest rates for 2025 are shaping up to create a buyer-friendly environment, particularly in Calgary’s affordable and dynamic real estate market. With rates projected to stabilize at or below current levels, and Calgary’s economy and housing market offering compelling opportunities, now is the time to plan your next move.
Ready to make 2025 your year to buy in Calgary? Contact Cedarglen Living today.
Sources
- Bank of Canada Interest Rate Trends: Bank of Canada
- Current Mortgage Rates in Canada: Ratehub.ca
- 2025 Interest Rate Projections: WOWA.ca
- Calgary Housing Market Insights: Calgary Real Estate Board
