Inflation Cools — What It Could Mean for Your Mortgage
Big news this week: Canada’s annual inflation rate cooled to 1.7% in July, down from 1.9% the month before. The main driver? A steep drop in gas prices (down 16.1% compared to last year 🚗⛽).
Why does this matter for you? Because when inflation cools, the Bank of Canada has more wiggle room to consider cutting interest rates. Their next big decision is coming up on September 17, and this new data could push them closer to lowering rates.
The Good, the Not-So-Good
✅ Good news: Inflation is falling faster than economists expected. That’s a positive sign for anyone hoping for more affordable borrowing costs.
⚠️ Trickier news: Housing costs are still climbing. Rents rose 5.1%, mortgage interest costs went up 4.8%, and property taxes are also up. So while overall inflation is down, the cost of keeping a roof over your head continues to put pressure on families.
What’s Next?
The Bank of Canada is watching a whole batch of reports (jobs, GDP, and another inflation update) before their September decision. They almost cut rates at their last meeting but held off. This new data may make them more confident to pull the trigger.
What This Means for You
If you’ve got a mortgage coming up for renewal, or you’re a first-time buyer watching the market, this is a key moment to pay attention. Even a small rate cut could:
Lower your monthly payments 💸
Make qualifying for a mortgage a little easier 🏡
Open up opportunities to refinance and free up cash flow
👉 Bottom line: We’re not in rate-cut land just yet, but the path is looking clearer. If you’re wondering how a potential cut (or today’s rates) impact your mortgage plans, let’s talk.
Your mortgage, but smarter. 💬
— Charlotte Ferguson, Mortgage Agent Level 2