How will tariffs potentially affect Interest rates

February 26, 2025 | Posted by: DLC West Coast Mortgages

As a mortgage broker in Canada, I often get questions about how global economic events might affect our financial landscape, particularly when it comes to interest rates and the cost of borrowing. One topic that's been on many minds lately is tariffs and how they might impact interest rates.

Tariffs are taxes imposed on imported goods.

When a country like Canada faces tariffs on goods we rely on, it can lead to increased costs for businesses and consumers alike. In some cases, these higher costs can slow down economic growth. And when growth slows, central banks may consider adjusting interest rates to help stimulate the economy. In our case, that means there's a possibility that the Bank of Canada might tweak rates in response to the overall economic impact caused by tariffs.

A few things to keep in mind: Tariffs can create uncertainty in global trade, which sometimes results in volatile financial markets. Volatility in the market can indirectly influence interest rates, as investors adjust their portfolios based on changing economic conditions. For homeowners and prospective buyers, even small fluctuations in interest rates can result in significant variations in mortgage payments over the long term.

Now, you might be wondering how this connects to your mortgage and home financing decisions. At our brokerage, we monitor both global economic trends and local market conditions closely. We recognize that your home is not just a place to live; it's also a significant investment in your future. By staying informed about issues like tariffs and interest rates, we are well-prepared to help you navigate any changes that may impact your mortgage options.

Whether you're a first-time homebuyer or looking to refinance your existing mortgage, our team can help you explore the best strategies to manage potential rate changes. We take pride in providing personalized advice, helping you understand not just the "what" but the "why" behind these economic trends. Our aim is to make you feel confident in your decision-making by ensuring you have an expert by your side who always prioritizes your best interests.

In uncertain times, clear communication and expert advice are more important than ever. So, if you have any questions about how tariffs, interest rates, or other economic factors might impact your mortgage plans, please feel free to reach out. We're here to help you make informed decisions that keep your financial goals on track, no matter what the global market brings.