This week, both the Bank of Canada and the US Federal Reserve cut their policy rates by 25 basis points.
That’s the headline.
But the real question isn’t what happened.
It’s what does it mean for you?
The big picture
Rate cuts aren’t a sign that everything is rosy.
They’re a sign that central banks see cracks forming.
Inflation pressures have cooled — but they’re not gone. Growth has slowed. Borrowing has become painful for households and businesses. And when debt service starts crowding out spending, central banks know they need to step in.
That’s why they trimmed. Not because the problem is solved, but because they’re trying to keep the system from stalling.
And here’s my opinion: I don’t believe this will be the only cut.
In my experience, once the cutting starts, it usually continues. My bet is we see another quarter point in October.
What this means for borrowers
Variable-rate borrowers
You’ll feel immediate relief — your payments drop slightly, and cash flow feels a little lighter.
— My advice: don’t use that extra room to stretch further. Use it to build a buffer. That’s what protects you if the unexpected happens.
Fixed-rate borrowers
This is where people tune out — and they shouldn’t. Lenders adjust fixed rates differently than variables, but another cut or two could create real opportunities.
— If your renewal is within the next 12 months, you should be actively planning. The structure of your mortgage will matter more than just the rate you lock in.
First-time buyers & investors
Here’s the part nobody talks about: falling rates don’t just lower payments — they pull more buyers back into the market. That means competition can return fast.
— If you’ve been waiting, this may be your chance. But don’t wait until it’s obvious to everyone else — by then, you’re competing in a crowd.
The illusion of safety
Here’s what concerns me most: how Canadians interpret news like this.
Too many people relax.
They think:
- “Rates are falling — I’ll wait for them to drop further.”
- “My cash is safe in the bank.”
- “The lowest rate is always the best choice.”
But in reality:
- Waiting too long often means missing the window.
- Cash loses value every year from inflation.
- The lowest rate is usually the least flexible — and the most expensive long-term.
This is why I say rate cuts don’t remove the need for strategy — they actually increase it.
My advice right now
- Don’t celebrate, act. Use this moment to review your mortgage, your debt, your buffers.
- Don’t get complacent. A quarter point cut doesn’t erase years of higher borrowing costs — but it may open up opportunities if you’re ready.
- Think cycles, not headlines. This won’t be the last cut. But don’t gamble on perfectly timing the bottom either. Position yourself so you benefit either way.
If you want to know how this shift could affect your mortgage — or how to position yourself if more cuts follow — let’s talk.
Talk soon,
— Vince
P.S.
Rate cuts make headlines. But the real win comes from how you use them. Don’t just watch the cycle — get ahead of it.
