Bank of Canada Rate Announcement Oct 29th, 2025

Erik Sepper • October 29, 2025

Bank of Canada lowers policy rate to 2¼%.

FOR IMMEDIATE RELEASE

October 29, 2025

The Bank of Canada today reduced its target for the overnight rate by 25 basis points to 2.25%, with the Bank Rate at 2.5% and the deposit rate at 2.20%.

With the effects of US trade actions on economic growth and inflation somewhat clearer, the Bank has returned to its usual practice of providing a projection for the global and Canadian economies in this Monetary Policy Report (MPR). Because US trade policy remains unpredictable and uncertainty is still higher than normal, this projection is subject to a wider-than-usual range of risks.

While the global economy has been resilient to the historic rise in US tariffs, the impact is becoming more evident. Trade relationships are being reconfigured and ongoing trade tensions are dampening investment in many countries. In the MPR projection, the global economy slows from about 3¼% in 2025 to about 3% in 2026 and 2027.

In the United States, economic activity has been strong, supported by the boom in AI investment. At the same time, employment growth has slowed and tariffs have started to push up consumer prices. Growth in the euro area is decelerating due to weaker exports and slowing domestic demand. In China, lower exports to the United States have been offset by higher exports to other countries, but business investment has weakened. Global financial conditions have eased further since July and oil prices have been fairly stable. The Canadian dollar has depreciated slightly against the US dollar.

Canada’s economy contracted by 1.6% in the second quarter, reflecting a drop in exports and weak business investment amid heightened uncertainty. Meanwhile, household spending grew at a healthy pace. US trade actions and related uncertainty are having severe effects on targeted sectors including autos, steel, aluminum, and lumber. As a result, GDP growth is expected to be weak in the second half of the year. Growth will get some support from rising consumer and government spending and residential investment, and then pick up gradually as exports and business investment begin to recover.

Canada’s labour market remains soft. Employment gains in September followed two months of sizeable losses. Job losses continue to build in trade-sensitive sectors and hiring has been weak across the economy. The unemployment rate remained at 7.1% in September and wage growth has slowed. Slower population growth means fewer new jobs are needed to keep the employment rate steady.

The Bank projects GDP will grow by 1.2% in 2025, 1.1% in 2026 and 1.6% in 2027. On a quarterly basis, growth strengthens in 2026 after a weak second half of this year. Excess capacity in the economy is expected to persist and be taken up gradually.

CPI inflation was 2.4% in September, slightly higher than the Bank had anticipated. Inflation excluding taxes was 2.9%. The Bank’s preferred measures of core inflation have been sticky around 3%. Expanding the range of indicators to include alternative measures of core inflation and the distribution of price changes among CPI components suggests underlying inflation remains around 2½%. The Bank expects inflationary pressures to ease in the months ahead and CPI inflation to remain near 2% over the projection horizon.

With ongoing weakness in the economy and inflation expected to remain close to the 2% target, Governing Council decided to cut the policy rate by 25 basis points. If inflation and economic activity evolve broadly in line with the October projection, Governing Council sees the current policy rate at about the right level to keep inflation close to 2% while helping the economy through this period of structural adjustment. If the outlook changes, we are prepared to respond. Governing Council will be assessing incoming data carefully relative to the Bank’s forecast.

The Canadian economy faces a difficult transition. The structural damage caused by the trade conflict reduces the capacity of the economy and adds costs. This limits the role that monetary policy can play to boost demand while maintaining low inflation. The Bank is focused on ensuring that Canadians continue to have confidence in price stability through this period of global upheaval.

Information note

The next scheduled date for announcing the overnight rate target is December 10, 2025. The Bank’s next MPR will be released on January 28, 2026.

Read the October 29th, 2025 Monetary Report

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ERIK SEPPER
MORTGAGE AGENT

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How Your Loans and Spending Habits Are Quietly Shaping Your Credit Score

By Erik Sepper • April 10, 2026

Your credit score is one of the most important numbers in your financial life — especially when it comes to getting a mortgage. But for most Canadians, how that number actually gets calculated remains a bit of a mystery.

Going Through a Divorce? Don’t Let Your Credit Take the Hit

By Erik Sepper • April 8, 2026

Going Through a Divorce? Don’t Let Your Credit Take the Hit Divorce is stressful enough without adding financial fallout to the mix. Between lawyers, paperwork, and emotional strain, it’s easy to overlook how a separation can impact your credit. But your financial future depends on protecting it now—because long after the dust settles, a damaged credit score can linger. Here are a few smart steps to help keep your credit strong and your finances steady as you move forward. 1. Take Control of Joint Debts When it comes to joint debt, both parties are equally responsible—no matter what your divorce agreement says. If your ex misses a payment on an account with your name attached, your credit takes the hit too. Go through all joint credit cards, loans, and lines of credit. Wherever possible: Close joint accounts to stop future shared use. Transfer balances to the person responsible for repayment. Notify lenders in writing of any changes to account ownership. Once everything is updated, pull your credit report after three to six months to confirm all joint accounts have been closed and reporting correctly. Mistakes happen—stay proactive to prevent surprises later. 2. Open Your Own Bank Accounts Separation means financial independence, and that starts with your own banking. Open a new chequing account in your name only and redirect your pay deposits and bill payments there. At the same time, close any joint bank accounts and change passwords on existing online banking and credit profiles. Even in peaceful separations, shared access can cause confusion—or conflict. Protect yourself by ensuring your money and information are secure. 3. Start Building Credit in Your Name If most of your past credit was tied to your spouse’s name, now’s the time to establish your own. Apply for a small personal credit card or secured credit product . Use it sparingly and pay it off in full each month. This helps you build a solid individual credit history, setting the stage for future goals like buying a home, refinancing, or starting fresh financially. 4. Keep an Eye on Your Credit Monitor your credit report regularly for errors or unexpected changes. You can request free reports from both major credit bureaus in Canada— Equifax and TransUnion —once a year. Tracking your credit isn’t just about catching mistakes; it helps you see your progress as you rebuild your financial independence. Final Thoughts Divorce can be emotionally draining, but protecting your credit doesn’t have to be complicated. By taking a few careful steps now—closing joint accounts, building credit in your name, and monitoring your reports—you’ll safeguard your financial health and gain peace of mind as you start your next chapter. If you’d like personalized guidance on managing credit during or after a divorce, reach out anytime. I’d be happy to walk you through your options.

What Online Mortgage Calculators Can—and Can’t—Tell You

By Erik Sepper • April 1, 2026

What Online Mortgage Calculators Can—and Can’t—Tell You Online mortgage calculators are everywhere—and on the surface, they seem like a no-brainer. You plug in some numbers, and out pops what you can “afford.” Simple, right? Not quite. While the math itself is correct, the story behind those numbers is often misleading. Mortgage qualification isn’t just about numbers—it’s about context, risk, and lender policy. And that’s where calculators fall short. The Numbers Are Accurate—but the Picture Isn’t An online calculator can show you what a payment might look like at a given interest rate, or how making extra payments could reduce your amortization. That’s useful information! But when it comes to mortgage qualification , calculators don’t account for the many variables that lenders consider, such as: Your credit history and score Employment type (salary, self-employed, contract) Outstanding debts and monthly obligations Assets, savings, and down payment source The property type and location you’re buying Lenders evaluate all these factors through their internal risk models. That means two people entering the exact same numbers into a calculator could receive very different results when they actually apply for a mortgage. Why Online Calculators Can Mislead You When you see a “How much can I afford?” or “Mortgage Qualification” calculator online, it’s easy to treat the result as fact. But these tools don’t know your financial story—they only crunch the data you enter. A calculator can’t predict how a lender views your risk, how new mortgage rules apply to your file, or how things like spousal support, car loans, or variable income will impact approval. In short: calculators estimate payments, not qualification . Use Calculators the Right Way Don’t get us wrong—online calculators still have value. Use them to explore different “what-if” scenarios: How do payments change with different down payment amounts? How would a rate increase affect affordability? What if you added $100 a month to your payments? These tools are great for helping you understand your comfort zone. Just remember: they’re a starting point, not a green light. The Real First Step: Get a Pre-Approval If you’re serious about buying a home, skip the guesswork and get a mortgage pre-approval . It’s quick, free, and gives you real-world clarity on what you can afford. A pre-approval looks at your full financial picture—income, credit, debts, assets—and provides a framework for your purchase price, payment range, and rate options. It’s the only way to get a reliable answer to the question, “What can I really afford?” Final Thoughts Online calculators are convenient, but they can’t replace expert advice. Think of them as a starting point, not a solution. A professional mortgage broker can interpret the numbers, navigate lender policies, and tailor your financing strategy to your actual situation. If you’d like help understanding your true buying power—or want to get pre-approved with confidence— reach out anytime . I’d be happy to walk you through your options and help you make sense of the numbers.