If you’ve been thinking about buying a home, you’ve likely noticed how often “interest rates” make the news — and for good reason. Small changes in the Bank of Canada’s policy rate can have a big impact on your monthly payments, your mortgage approval, and ultimately, the type of home you can afford.

Whether you’re a first-time buyer or considering a move-up home, understanding how rate changes affect your home-buying power can help you make smarter, more confident decisions.

What’s Behind the Recent Rate Changes?

Over the past few years, Canada has seen a series of rate increases and gradual decreases as the Bank of Canada works to balance inflation and economic growth.

When inflation rises, the Bank of Canada typically increases its benchmark interest rate to slow spending. When inflation cools, rates may drop again to stimulate borrowing.

For homebuyers, these shifts trickle down into mortgage rates — affecting both fixed and variable options offered by lenders across the country.

Some other topics you might find helpful when thinking about selling a home in Manitoba. Find out in the posts below:

• 5 Stress-Reducing Tips When Selling Your Home in Winnipeg
• Navigating the Emotional Terrain: Considerations for Selling Your Parent’s Home in Winnipeg
• Should I Renovate My Home Before Selling?

How a Rate Change Impacts Your Monthly Payments

Even a small adjustment can make a big difference over time.

Let’s say you’re buying a $400,000 home with a 10% down payment ($40,000) and a 25-year amortization:

Mortgage Rate Monthly Payment (approx.)
4.5% —> $1,980
5.5% —> $2,225
6.5% —> $2,490

That’s a difference of over $500 per month — and roughly $6,000 per year — between the lowest and highest rate in this example.

For many buyers, that means adjusting your price range or increasing your down payment to stay within your budget.

The “Stress Test” Still Matters

In Canada, all buyers must qualify for a mortgage using the higher of the current rate or the federal “stress test” rate (usually 2% above your actual mortgage rate).

This rule ensures you can still afford your payments if rates rise again, but it also means your maximum approval amount may be lower than expected.

For Example:
If you can comfortably afford a $2,200/month payment today, lenders will test your application as if your payment were around $2,500–$2,600.

Working with a Realtor and a trusted mortgage professional early on helps you understand what you truly qualify for before you start shopping.

Looking for even more resources for a streamlined home selling experience? The posts below will get you started:

• Should You Work With a Full Time Realtor® When Buying or Selling?
• Is Staging Really Necessary When Selling Your Winnipeg Home?
• Why Professional Photos Matter When You’re Selling Your Home

What Buyers Can Do Right Now

Even with changing rates, opportunities still exist — especially in markets like Manitoba, where prices remain relatively stable compared to major urban centres.

Here’s how to stay competitive:

• Get pre-approved early. Lock in your rate for 90–120 days while you search.
• Know your budget. Factor in property taxes, insurance, and utility costs , not just the mortgage payment.
• Stay flexible. Consider different property types or neighbourhoods to maximize value.
• Work with local experts. A Realtor who understands current market dynamics can help you time your purchase and negotiate effectively.

What Falling Rates Could Mean for You

If rates start to drop again — as many economists predict for 2025 — we may see renewed demand from buyers who’ve been waiting on the sidelines. That could increase competition and stabilize prices.

Getting prepared before that happens means you’ll be ready to act quickly when the right home appears — and potentially secure a lower rate before others jump back in.

Let’s Talk About Your Buying Power

Interest rates can feel complex, but the right guidance makes all the difference. Whether you’re buying your first home or your next one, we’re here to help you navigate every step with confidence.

📞 Contact us today for expert real estate advice based on current market data, Access to trusted local mortgage professionals and strategies to buy smart, in any rate environment. Contact us by email info@goodfellowrealty.com or call 204-224-2551