18 Jun Mortgage Strategies for a 2.75% Rate Environment: How Buyers and Homeowners in BC Can Act Now

After months of rising borrowing costs, the Bank of Canada’s latest announcement has brought a welcome shift. On June 4, 2025, the central bank held its policy rate at 2.75%, maintaining the level set in April and signaling a cautious, measured approach to further changes. This marks a significant departure from the aggressive hikes seen in 2022–2023, and for homebuyers and current mortgage holders across Surrey, Abbotsford, and the Fraser Valley, the implications are considerable.

Whether you’re a first-time homebuyer, someone looking to refinance, or planning your mortgage renewal, this rate environment opens up new opportunities. But timing and strategy are critical. In this blog, we break down how to navigate the current market with confidence and maximize your mortgage decisions in British Columbia.

Understanding the Current Market Climate

Rate Cuts Are Here—But Not Forever

The Bank of Canada has cut its key rate three times so far in 2025, bringing it from 3.25% in January down to the current 2.75%. These adjustments were in response to slowing inflation and signs of economic softening.

But Governor Tiff Macklem has emphasized a “wait-and-see” approach, suggesting that the central bank may pause rate cuts to assess whether inflation remains under control. This creates a temporary window for borrowers to secure better rates—particularly on fixed-rate mortgages, which have already started to decline in anticipation of a long-term low-rate cycle.

What This Means for Buyers in Surrey, Abbotsford, and Nearby Areas

First-Time Buyers Are Gaining an Edge

With borrowing costs lower and government incentives like the GST exemption for homes under $1 million, first-time homebuyers have more leverage than they’ve had in years. Lower rates improve affordability and may increase pre-approval amounts, allowing buyers to consider homes in better locations or with more space.

If you’re unsure where to start, our guide on what first-time buyers can expect covers these updates in more detail.

The Shift to Fixed-Rate Mortgages

While variable-rate mortgages remain attractive in a declining rate environment, many BC buyers are gravitating toward short-term fixed rates (1–3 years) to take advantage of current pricing while keeping their options open for future refinancing.

According to recent trends, some lenders in the Fraser Valley are now offering fixed rates below 5%, a marked decline from the 6–7% seen in 2023.

Learn more in our post: Fixed Mortgage Rates Are Falling: What Homeowners and Buyers in BC Should Do Now.

For Current Homeowners: Time to Act

Strategic Mortgage Refinancing

If your mortgage is locked in at 5.5% or higher, a refinance could reduce your interest burden and monthly payments significantly. The key, however, lies in assessing break penalties and working with an advisor to calculate your net savings.

For example, a household in South Surrey refinancing a $600,000 mortgage from 5.6% to 4.8% could save over $200/month, even after factoring in penalties.

Check out our full breakdown in The Complete Guide to Mortgage Refinancing in BC.

Preparing for Early Renewals

With many homeowners due for renewal in late 2025 or early 2026, some are opting for early renewals while rates are favourable. If you’re within 4–6 months of your term ending, you may be eligible to lock in new terms now without major penalties.

Read more: The Complete Guide to Mortgage Renewal in Abbotsford, Surrey & Nearby Areas

The Impact on Local Real Estate Activity

The return of affordability is fueling demand in BC’s suburban markets. Realtors in Abbotsford and South Surrey report more inquiries, particularly in the $750,000–$950,000 price range. This aligns with homes eligible for the federal GST exemption, amplifying buyer activity among young families and newcomers.

Meanwhile, inventory levels have remained stable, reducing competition and giving buyers more time to evaluate their options. This combination—lower rates, more listings, and targeted incentives—is creating a balanced market for the first time in several years.

How to Choose the Right Mortgage Strategy in Today’s Market

With the Bank of Canada holding the key policy rate at 2.75%, Surrey, Abbotsford, and surrounding communities are witnessing renewed activity in both purchase and refinance markets. But every borrower is different, and the right move depends on your goals.

Let’s break down practical strategies by borrower type.

For First-Time Buyers in BC

If you’re purchasing your first home, now is the time to move forward with confidence. Thanks to the GST exemption for homes under $1 million, first-time buyers are now saving up to 5% on their home purchase, especially in high-demand suburbs like Clayton Heights, Clearbrook, and Fleetwood.

Here’s how to maximize the opportunity:

• Get pre-approved: Start by getting a clear estimate of what you can afford with today’s lower rates. Explore our guide to first-time buyer mortgage approval.
• Target the sweet spot: Focus on homes in the $750K–$950K range to fully leverage the GST benefit while staying within current affordability limits.
• Work with a broker: Local expertise helps you navigate the fast-moving Fraser Valley market and identify lenders with the most competitive products.

For Homeowners Planning to Refinance

With fixed rates trending downward, refinancing in a 2.75% rate climate can significantly reduce your interest cost. If you locked into a mortgage in 2022 or 2023 when rates peaked near 6%, now is the time to explore your options.

Smart refinancing tips:

• Calculate your break-even point between prepayment penalties and monthly savings.
• Consider a blended mortgage if full refinancing isn’t feasible.
• Use tools like the mortgage payment calculator to visualize your new financial picture.

If you need deeper insights, see: 5 Amazing Benefits of Refinancing Your Mortgage

For Homeowners Nearing Renewal

Renewals in a falling rate environment are a unique opportunity—but only if you act early. If your renewal date is within the next 6 months, you may be able to renegotiate without penalties.

Key steps to take:

• Get quotes from multiple lenders, not just your current bank.
• Check out top mistakes to avoid when renewing
• Work with an advisor to assess short-term fixed vs. variable rate options.

More support here: The Complete Guide to Mortgage Renewal

Local Outlook: What’s Happening in the Fraser Valley

Housing activity in Abbotsford, Surrey, and Langley is on the upswing. Real estate boards are reporting:

• Increased buyer traffic at open houses
• Rising interest in townhomes and entry-level detached homes
• More listings priced under $1 million entering the market

If this trend continues into July and the Bank of Canada signals another rate cut, we could see a surge in demand through the fall—making this summer a smart time to lock in a mortgage or buy before competition heats up.

FAQs: Mortgage Strategies in a 2.75% Interest Rate Market

Q1. What type of mortgage is best in today’s rate environment?

Short-term fixed-rate mortgages (1–3 years) offer stability while positioning you to refinance later. For risk-tolerant borrowers, variable rates may offer lower initial rates.

Q2. Can I refinance my mortgage if I’m locked into a fixed term?

Yes, but you must account for prepayment penalties. Work with a mortgage broker to calculate the costs vs. savings and determine if refinancing now makes financial sense.

Q3. How can I secure the lowest rate possible?

A mortgage broker can shop across dozens of lenders to get you the best available rate. Also, having a strong credit score and stable income improves your rate offers.

Q4. Is now a good time to renew my mortgage early?

If you’re within 120–180 days of your renewal, most lenders allow you to renew early without penalty. This lets you lock in a better rate before potential market changes.

Q5. What if I’m self-employed?

Mortgage options exist for self-employed buyers too. Documentation may be more extensive, but approvals are achievable with the right support. Explore self-employed mortgage options to learn more.

Final Thoughts

Whether you’re buying, refinancing, or renewing, the 2.75% rate environment provides a valuable—but possibly short-lived—opportunity to lower your housing costs and improve long-term affordability.

At Satbir Bhullar Mortgages, we provide tailored mortgage solutions for families and individuals in Abbotsford, Surrey, and the Fraser Valley. From first-time homebuyer approvals to complex refinancing scenarios, we’re here to help you make confident financial decisions.