On September 17, I joined Jay Lewis to discuss the Bank of Canada’s latest announcement — one that could have an impact on home buyers here in Alberta. For the first time since March, the Bank of Canada cut its interest rate by a quarter percent, and it has left the door open for another cut later this year.

Why the Rate Was Cut

As I explained during the interview, Governor Tiff Macklem cited three main reasons behind the decision:

• A soft labour market. “Unemployment is now at 7.1% nationally, the highest since August 2021,” I noted. “It’s especially impacting Ontario’s auto industry, but here in Alberta we’re feeling it too.”

• Encouraging inflation numbers. Inflation has eased to 1.9% in August, down from earlier this year. “Core CPI is still just above 3%, but recent trends are encouraging,” I said.

• The removal of retaliatory tariffs. Ottawa’s decision to lift tariffs on many imported U.S. goods has helped ease inflationary pressure.

GDP also fell by 1.5% in the second quarter. “If we see another quarter of negative GDP, that’s officially a recession,” I explained. “That would give the Bank of Canada even more reason to cut rates again, provided inflation stays under control.”

Fixed or Variable? The Big Question for Buyers

Jay asked me the question many buyers are wondering: Should you choose a variable or fixed mortgage today?

“Right now, a five-year fixed mortgage is available around 3.99% to 4.25%,” I explained. “Variable is about the same, at 4%. The Bank is likely to cut rates again in December, but if you look at the next five years, you’ll probably end up paying more with a variable than with a fixed.”

In my view, fixed rates make more sense for most buyers today — unless you’re confident that rates will continue to fall quickly or you’re planning to sell your home within a year.

What This Means for Alberta Buyers

Lower rates can improve affordability and help with qualifying for a mortgage, but the decision between fixed and variable remains critical. My advice: run the numbers carefully and make sure your mortgage strategy fits your long-term plans.

Watch the Full Interview

You can watch my full conversation with Jay Lewis on YouTube here: Watch the video

If you find the video helpful, don’t forget to like, subscribe, and leave a comment. We’d love to hear what topics you’d like us to cover in the future. And don’t be afraid to reach out to me directly with your personal circumstances and home ownership goals.