Bank of Canada Rate Announcement: What It Means for Calgary Real Estate
The Latest Interest Rate Update: What Just Happened?
On July 31, 2025, the Bank of Canada announced it will hold its key interest rate at 4.50%, maintaining its cautious stance amid continued efforts to stabilize inflation. This marks the second consecutive announcement where the central bank has kept rates unchanged after a modest 0.25% cut earlier in June.
While many Canadians were hoping for a more aggressive rate cut this summer, the Bank's decision reflects a measured approach. Inflation has cooled but not quite enough to justify rapid reductions. For anyone active in the Calgary real estate market, this interest rate update carries meaningful implications—especially for mortgage rates, affordability, and future price trends.
Let’s break it down.
What This Means for Mortgage Rates and Approvals
The Bank of Canada’s overnight rate directly influences variable mortgage rates and indirectly impacts fixed rates, which are more tied to bond yields.
Here’s how the current rate pause affects buyers and homeowners:
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Variable-rate mortgages will remain at current levels. Borrowers with adjustable-rate mortgages or home equity lines of credit (HELOCs) won’t see any changes in their monthly payments.
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Fixed-rate mortgages have already dropped slightly in recent weeks, thanks to lower bond yields as markets anticipate further cuts later in the year.
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Mortgage approvals remain cautious. While rates are slightly more affordable than in early 2024, banks are still stress-testing borrowers at higher qualifying rates (~6.5–7%), making it challenging for some buyers to qualify for the same budget as before.
💡 Tip: If you're a buyer, now is a good time to explore mortgage pre-approvals while rates are stable. Locking in a fixed rate could give you more predictability in the months ahead.
Short-Term Impact on the Calgary Real Estate Market
The Calgary real estate market has shown remarkable resilience compared to other major Canadian cities. With sustained in-migration, a diversified economy, and relatively affordable home prices, demand remains strong.
Here’s what we’re seeing:
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Sales activity is steady, especially in the detached and townhome segments. First-time buyers and upsizers are active, taking advantage of the summer market.
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Inventory remains low, which continues to place upward pressure on prices in many communities, particularly in the inner city.
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Price growth has moderated, but there’s no significant downturn. Unlike markets in Ontario or B.C., Calgary isn’t seeing major price drops—it’s more of a leveling-off.
In short, the Bank of Canada’s rate hold provides a window of stability, helping maintain market confidence heading into the fall.
Long-Term Outlook: What’s Ahead for Rates and Real Estate?
Many economists predict that further rate cuts could come toward the end of 2025 or early 2026—especially if inflation continues to trend downward. If that happens, it will have major implications for the Calgary housing market:
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Affordability could improve, especially for buyers priced out over the past 18 months.
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Demand may spike, especially in the entry-level and investment segments, leading to more competition and potential bidding wars.
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Investor activity is expected to increase, particularly in rental-friendly buildings and cash-flow-positive properties, as returns become more attractive with lower borrowing costs.
That said, the Bank of Canada will remain cautious. Rates won’t return to the ultra-low levels of the pandemic era, so buyers and investors should plan for a “new normal” of moderate borrowing costs.
Advice for Buyers, Sellers, and Investors in Calgary
Whether you’re looking to buy your first home, sell your current property, or invest in Calgary real estate, here’s what you should consider right now:
For Home Buyers:
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Explore both fixed and variable options. Fixed rates are slightly more attractive right now, and locking in could offer peace of mind if your budget is tight.
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Get pre-approved before you shop. This helps you understand your true buying power and makes your offer more competitive.
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Consider value-focused neighbourhoods. Communities like Capitol Hill, Ogden, and Mount Pleasant continue to offer strong long-term growth potential.
For Home Sellers:
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Take advantage of low inventory. With fewer listings on the market, well-prepared homes are selling quickly—often at or above asking price.
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Stage and price smartly. While demand is steady, buyers are still cautious and value-driven. A strategic pricing strategy can maximize your return.
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Sell before rates drop further. If rate cuts come later in the year, more listings will hit the market, increasing competition.
For Real Estate Investors:
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Watch mortgage trends closely. Even a 0.25% drop can improve cash flow and ROI significantly.
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Focus on rental-friendly properties. Multi-family, legal suites, and condo buildings with solid reserve funds are great long-term holds.
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Think ahead. Buy in areas with upcoming infrastructure (like Green Line LRT expansions) or near schools and employment hubs.
Final Thoughts: Stay Informed, Stay Strategic
The latest Bank of Canada rate announcement confirms a holding pattern—but this quiet period might be the perfect time to make your move in the Calgary real estate market.
Whether you're buying, selling, or investing, now is the time to plan ahead. With mortgage rates stabilizing and the market still moving, smart decisions today could mean significant gains tomorrow.
Want personalized home buying advice or a market evaluation of your property? Let’s talk.
Reach out anytime for tailored guidance on your next move in Calgary’s ever-evolving market.
Dylan Kisilowski
Calgary Realtor | Century 21 Bamber Realty
📞 Call/Text: 403-371-1196
📧 Email: [email protected]
🌐 www.dylankisilowski.com
Helping you make confident real estate decisions—every step of the way.
