How many residential mortgages can I have?

The number of mortgages you can have is unlimited. Rather, people are constrained by their capacity to manage several mortgages or their financial status. First and second mortgages are two mortgages that are typically held concurrently on a same property.

What is a second mortgage Canada?

Second mortgage is a second loan or funding you take on your residential property. Interest rates on second mortgages are usually higher than first mortgages and you need to pay both your mortgages at the same time.

What is a conventional mortgage Canada?

A conventional mortgage in Canada is a loan where the down payment is at least 20% of the property's purchase price. This means that the loan amount is 80% or less of the property's value.

How long can you mortgage a home in Canada?

In Canada, you can mortgage a home for 25 years. If you are a first-time buyer or purchasing a new build you can mortgage it for 30 years. These rules took effect on December 15, 2024.

Can I buy a home with less than a 20% down payment?

The minimum amount you need for your down payment depends on the purchase price of the home. If your down payment is less than 20% of the price of your home, you'll typically need to buy mortgage loan insurance. If you're self-employed or have a poor credit history, your lender may require a larger down payment.

Should I choose a fixed rate or variable rate mortgage?

Interest rates either rise or fall. But a study suggests that homeowners with a variable mortgage fair better than a fixed rate one.

14 Feb How U.S. Tariffs May Impact B.C. Mortgage Rates in 2025

Posted at 15:04h in Mortgage Interest Rate by Satbir Bhullar

British Columbia’s real estate market is one of the most dynamic in Canada, with cities like Surrey, Abbotsford, and Langley experiencing strong demand despite fluctuating interest rates. However, recent U.S. tariff threats on Canadian goods could add another layer of complexity to mortgage rates, home prices, and overall affordability.

Trade tensions between the U.S. and Canada are nothing new, but with the possibility of a 25% tariff on Canadian exports, the economic consequences could be significant. Mortgage borrowers, homebuyers, and investors in B.C.’s Fraser Valley and Metro Vancouver region need to understand how these changes might affect their financial decisions.

Let’s explore how U.S. tariffs could impact mortgage rates in Abbotsford, Surrey, and surrounding areas, and what you can do to protect yourself in a changing market.

1. The Link Between U.S. Tariffs and Mortgage Rates in British Columbia

Most people assume mortgage rates are solely dictated by Bank of Canada (BoC) interest rate decisions. While the BoC plays a crucial role, factors such as inflation, bond yields, and global economic trends also influence borrowing costs.

When the U.S. imposes tariffs on Canadian goods, it sets off a chain reaction in the economy:

Tariffs Increase Costs for B.C. Businesses: Industries such as lumber, agriculture, and manufacturing may face higher operating expenses.
Inflation Rises: Businesses pass these costs on to consumers, making everyday goods and services more expensive.
Bank of Canada Responds: If inflation remains high, the BoC may delay rate cuts or even raise rates to control rising prices.
Mortgage Rates Stay Elevated: Higher interest rates mean more expensive home loans for buyers and those renewing mortgages.

Interesting Fact: How Past Trade Wars Have Affected Interest Rates

In 2018, when the U.S. imposed tariffs on Canadian steel and aluminum, inflation ticked higher, and the BoC had to pause interest rate cuts. If similar tariffs are introduced in 2025, we could see a repeat scenario, keeping mortgage rates in Surrey and Abbotsford higher for longer.

2. Will Mortgage Rates in B.C. Rise or Fall in 2025?

Mortgage rates in British Columbia will depend on how the economy reacts to tariffs. Below are two possible scenarios:

Scenario 1: Mortgage Rates Stay High Due to Inflation

If U.S. tariffs drive up the cost of imports, inflation could remain stubbornly high. In this case:

The Bank of Canada may slow down or pause rate cuts, keeping mortgage rates higher than expected.
Fixed mortgage rates in B.C. could stay above 4% well into 2025.
Variable-rate mortgage holders may face more payment fluctuations, adding financial uncertainty.

This scenario would be especially tough for homeowners renewing mortgages in 2025 and 2026, as they could be forced into significantly higher rates compared to their previous terms.

Scenario 2: Economic Slowdown Leads to Lower Mortgage Rates

If tariffs cause widespread economic slowdown, the Bank of Canada may cut rates further to stimulate growth. In this case:

Mortgage rates could drop, making it cheaper to buy or refinance a home.
First-time homebuyers in Surrey and Abbotsford may find more opportunities, as affordability improves.
Real estate investors could take advantage of lower borrowing costs, leading to renewed market activity.

The key takeaway? Mortgage rates will depend on whether tariffs create more inflation or more economic weakness.

Interesting Fact: The Impact of U.S. Tariffs on the Canadian Dollar

In times of trade uncertainty, the Canadian dollar tends to weaken against the U.S. dollar. A weaker dollar makes imports more expensive, which could drive inflation higher and delay mortgage rate relief.

3. Impact on Home Prices in Surrey, Abbotsford, and Fraser Valley

Home prices in British Columbia are highly sensitive to interest rate changes. If mortgage rates remain elevated due to inflation, home price growth could slow down, leading to fewer bidding wars and more balanced market conditions.

However, if rates decline due to economic weakness, lower borrowing costs could drive up buyer demand, putting upward pressure on home prices.

Current Market Insights in British Columbia:

Home sales in Surrey and Abbotsford have increased by nearly 20% compared to last year, despite high interest rates.
Over 250,000 mortgages in B.C. are set for renewal by 2026, meaning many homeowners could face payment shocks if rates remain high.
New construction in Metro Vancouver and Fraser Valley has slowed, potentially leading to a housing supply shortage in 2025.

Interesting Fact: Home Prices in Abbotsford vs. Surrey

Abbotsford has historically been a more affordable alternative to Metro Vancouver, with benchmark home prices around $950,000. However, Surrey’s rapid growth and increased demand for townhouses and condos have pushed prices above $1.1 million, making affordability a growing concern.

4. What Should Homebuyers and Homeowners in British Columbia Do?

Given the uncertainty surrounding mortgage rates and U.S. tariffs, it’s important to have a strategy in place.

For Homebuyers in Surrey, Abbotsford, and Nearby Areas

Lock in a mortgage rate now before further inflationary pressures take hold.
Consider short-term fixed-rate mortgages (2-3 years) to stay flexible.
If home prices drop, be prepared to move quickly on a good deal.

For Homeowners Renewing Their Mortgage

Start shopping for renewal options at least 6 months early to secure the best rate.
Consider switching to a variable rate if rates are expected to decline later in 2025.
Work with a mortgage broker to compare multiple lenders and avoid paying higher-than-necessary renewal rates.

For Investors Looking at Real Estate in B.C.

Monitor interest rate trends closely before making a purchase decision.
Look for rental property opportunities, as demand in Surrey and Abbotsford remains strong.
Consider short-term rental markets if mortgage rates begin to fall, as demand could pick up.

5. Get Expert Mortgage Advice for British Columbia’s Changing Market

Navigating mortgage rate changes in uncertain economic conditions can be challenging, but you don’t have to do it alone. At Satbir Bhullar Mortgages, we specialize in helping homebuyers and homeowners in Abbotsford, Surrey, and surrounding areas secure the best mortgage rates and strategies.

Whether you’re purchasing a new home, renewing your mortgage, or looking to refinance, our team is here to guide you through the process and help you make the best financial decisions. Contact Us for a Free Consultation.

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