16 Apr Fixed Mortgage Rates Are Falling: What Homeowners and Buyers in BC Should Do Now
Fixed mortgage rates in Canada are showing a welcome trend in 2025: they’re going down. After several years of upward pressure due to inflation and aggressive Bank of Canada rate hikes, fixed rates are now on a slow but steady decline. As of mid-April, many lenders are offering 5-year fixed mortgage rates between 4.50% and 4.79%, with some brokers able to secure even lower discretionary rates depending on the borrower’s profile.
This shift is significant for both buyers and homeowners in areas like Abbotsford, Surrey, Langley, and surrounding communities across British Columbia. Lower fixed rates not only improve affordability but also open new doors for refinancing, early renewals, and stronger mortgage qualification.
In this blog, we’ll explore why rates are falling, what that means for you, and how to take action in this dynamic market.
Why Are Fixed Mortgage Rates Falling?
Fixed mortgage rates are influenced not by the Bank of Canada’s policy rate, but by the 5-year Government of Canada bond yield. When bond yields drop, fixed mortgage rates typically follow.
There are several key factors contributing to this decline:
First, inflation has been trending downward and is now close to the Bank of Canada’s target range. As inflation cools, there’s less pressure to maintain high interest rates.
Second, the Bank of Canada has held its overnight rate steady at 2.75%, signaling a more cautious, data-driven approach going forward. This steadiness has calmed the lending market.
Third, economic uncertainty — both domestic and global — has made bonds more attractive to investors, increasing demand and pushing down yields. In turn, this softens the rates that lenders use to price fixed mortgages.
Lastly, housing activity slowed noticeably in 2023 and early 2024. With competition picking up again in the 2025 spring market, lenders are now adjusting rates to attract new business and stay competitive.
Fixed vs. Variable: Why Fixed Is Back in the Spotlight
In previous years, variable rates were often significantly lower than fixed rates. That’s no longer the case in 2025. The difference between the two has narrowed considerably, prompting many borrowers to take a fresh look at fixed options.
Fixed-rate mortgages provide predictable monthly payments, which is especially valuable for households on a budget or buyers planning to stay in their homes for five years or more. With rates declining, the risk of locking in at a peak has diminished, making fixed terms an attractive choice again.
What Lower Fixed Rates Mean for Buyers
For homebuyers, especially those entering the market for the first time, falling rates bring multiple advantages.
First, lower fixed rates improve your ability to qualify for a mortgage. In Canada, the mortgage stress test requires borrowers to qualify at the greater of their contract rate plus two percent, or a benchmark set by regulators. As fixed rates decline, that qualification bar drops as well — giving buyers more borrowing power.
Second, lower rates reduce monthly payments, making homes in Surrey, Abbotsford, or Langley more affordable. This can mean the difference between choosing a condo and a townhouse, or a townhouse and a detached home.
Third, lower rates increase confidence. In a market where buyers have been hesitant due to rate volatility, fixed-term stability encourages action, particularly for families looking to settle into a long-term residence.
What Lower Fixed Rates Mean for Homeowners
If you already own a home, declining fixed rates open up important opportunities — particularly if you’re nearing renewal or looking to restructure your mortgage.
For those within 4 to 12 months of their renewal date, this could be the ideal time to shop for better terms. Many lenders allow you to renew early, and with rates dropping, waiting too long could mean missing out on today’s best offers.
If your current mortgage is locked in at a rate above 5.5%, it may be worth considering a refinance. This is especially true if you want to lower your monthly payments, access home equity, or consolidate debt. Even after factoring in potential penalties for breaking a mortgage early, the long-term interest savings or improved cash flow can make refinancing a smart financial move.
What About Investors and Upsizers?
If you’re planning to move into a larger home, purchase an investment property, or build a suite on your current property, lower fixed rates will improve your return on investment and overall affordability.
A lower mortgage rate reduces your carrying costs — the monthly expense of holding a mortgage — which is a key factor when evaluating a rental property or secondary suite. This could make previously unviable investments more attractive and profitable.
In communities like South Surrey, Langley Township, and Mission, buyers are increasingly looking for homes with income potential — such as legal basement suites or coach houses — that can help offset mortgage payments. Declining rates make this strategy even more appealing.
Market Conditions in the Fraser Valley
Spring 2025 has brought increased listing activity to the Fraser Valley. More homes are hitting the market in Abbotsford, Surrey, and Chilliwack, giving buyers more choice than in recent years.
At the same time, buyer interest is picking up. Lower rates are pulling many off the sidelines — particularly first-time buyers who delayed their purchase during the high-rate environment of 2023.
For sellers, this means pricing must be strategic. While demand is rising, buyers are still sensitive to overpricing, and homes that align with affordability thresholds are seeing the most activity.
The combination of lower rates, new government incentives, and improving inventory is creating a more balanced — and more active — real estate market in BC’s suburban and semi-urban areas.
What You Should Do Now — Buyer and Homeowner Strategies
The current fixed-rate environment is presenting real opportunities, but capitalizing on it requires preparation, timing, and the right financial guidance. Whether you’re planning to buy your first home, renew your mortgage, or refinance, now is the time to review your options.
First-Time Buyers: Get Pre-Approved and Stay Flexible
Pre-approval is critical in this market. It not only shows sellers that you’re serious but also protects you from rate increases while giving you time to shop confidently. Many lenders will hold a fixed rate for 90 to 120 days, allowing you to search for homes without worrying about sudden rate changes.
Focus your search on homes that fall within your affordability range, and consider properties with income potential, like basement suites. Markets such as Langley, East Abbotsford, and South Surrey are known for such inventory.
Also, pay attention to government incentives, such as the expected GST exemption on new homes under $1 million, which may further boost affordability in new developments.
Homeowners: Explore Early Renewals or Refinance Opportunities
If your mortgage is up for renewal in the next 6 to 12 months, you may have the option to lock in a better fixed rate early. Early renewals can help you avoid future uncertainty while benefiting from current rate trends.
If you’re carrying a higher-rate mortgage from 2022 or early 2023, refinancing could also be worth exploring. Even with a prepayment penalty, refinancing into a lower fixed rate might reduce your total interest cost or improve monthly cash flow.
Additionally, if you’re planning home improvements, renovations, or debt consolidation, accessing equity through refinancing at a lower rate is likely more cost-effective than using high-interest credit.
Investors and Move-Up Buyers: Leverage the Window
Investors who may have pulled back during the rate hike cycle are now re-entering the market. Lower fixed rates make properties with rental income more attractive and improve monthly cash flow projections.
Move-up buyers — especially those with growing families — can now better afford to transition to larger properties without seeing their payments spike. In areas like Clayton Heights, Willoughby, and West Abbotsford, more inventory is becoming available at competitive price points.
FAQs: Fixed Mortgage Rate Trends in 2025
Are fixed mortgage rates expected to continue declining?
There is potential for further modest declines, but most economists expect rates to stabilize through mid to late 2025. The current dip is largely due to easing bond yields and lower inflation pressures.
Should I wait before locking in a fixed rate?
If you’re ready to move forward with a purchase or renewal, locking in a fixed rate now can offer security. Rates may decline further, but waiting too long could mean missing out, especially if bond yields reverse course.
Is it better to go with a variable or fixed mortgage in 2025?
This depends on your risk tolerance and financial goals. With the spread between fixed and variable rates narrowing, fixed rates offer more predictability and remain popular for buyers who prefer stable payments over the next few years.
Can I break my current mortgage to access a better fixed rate?
Yes, but you’ll need to consider the prepayment penalty. For some homeowners, the interest savings from a lower fixed rate may outweigh the cost of breaking their existing term — particularly if they have over two years left on a higher-rate mortgage.
How do lower fixed rates affect mortgage qualification?
Lower rates reduce the qualifying rate used in Canada’s mortgage stress test. This can increase your borrowing power and help you qualify for a larger mortgage amount, assuming your income and debt levels remain stable.
Do all lenders offer the same fixed rates?
No. Fixed rates can vary widely between lenders — especially between major banks and broker-channel or credit union lenders. Working with a mortgage broker helps you compare across multiple institutions and access rate discounts not always advertised publicly.
Final Thoughts: Timing and Preparation Are Everything
The current mortgage market offers a rare mix of falling fixed rates, increased housing inventory, and federal affordability programs that are expected to launch or expand in the coming months. For buyers and homeowners across the Fraser Valley, that means opportunity — but only for those who act strategically.
If you’re in Abbotsford, Surrey, Langley, Chilliwack, or surrounding areas, the right move now could set you up for long-term financial advantage. Whether you’re buying your first home, upgrading to a larger space, or reviewing your renewal options, now is the time to speak with a mortgage professional.
A broker can help you:
- Compare fixed vs. variable options
- Assess refinance savings vs. penalties
- Secure a pre-approval with rate protection
- Understand local lender incentives and niche programs
The rate landscape is shifting. With the right guidance, you can move forward with clarity and confidence — while taking full advantage of the opportunities available in BC’s evolving mortgage market.