British Columbia Mortgage Rates Easing to 3.5 % Variable — Fixed Range 3.75–4.25 %

Vancouver | 10 Nov 2025 — 06:45 EST
Mortgage brokers across British Columbia are adjusting their offers as the Bank of Canada’s October rate cut begins to ripple through the market. latest provincial update (9 Nov 2025), some brokers now offer variable mortgage rates around 3.5 %, while 3- and 5-year fixed terms sit between 3.75 % and 4.25 % — levels not seen since mid-2023.

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Why Rates Are Shifting

The Bank of Canada’s October 29 policy decision — a 25-basis-point cut to bring the overnight rate to 2.25 % — triggered a domino effect in lending markets. Major banks and credit unions responded by lowering their prime rates to 4.45 %, translating into slightly smaller monthly payments for variable-rate borrowers in high-cost regions such as Vancouver, Kelowna and Victoria.

While bond yields remain sticky in the 3.2-3.4 % range — limiting how far fixed rates can fall — the overall trend still marks a turning point for mortgage affordability in the province.

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BC Snapshot from NerdWallet

A $600,000 mortgage at 3.5 % amortized over 25 years costs roughly $2,996 per month, compared with $3,155 at 3.8 %. That saves about $1,900 per year, providing notable relief for households facing tight budgets.

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Market Reaction

Local mortgage advisors say competition is heating up among smaller brokers and credit unions, which are trying to capture borrowers who delayed purchases in 2024. The 3.5 % variable threshold is psychologically important — it signals a return to “manageable” territory for many first-time buyers.

However, most lenders are still holding the line on stress-test requirements, meaning borrowers must qualify at rates roughly 2 % higher than contract levels. In practice, this means approval at a 5.45 – 6.25 % benchmark depending on lender policy.

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Borrower Scenarios

1. First-time buyers:
   Those entering the market after two years of high rates can finally see monthly payments align closer to pre-pandemic affordability. Yet qualifying remains tight because of stress-test ceilings.
2. Renewals in 2026:
   Borrowers who locked in low-2 % pandemic-era rates still face payment increases even at 3.5 – 3.8 %. Many are opting for shorter 1- to 3-year fixed terms to retain flexibility.
3. Investors and second-home buyers:
   Portfolio owners are testing variable products again, particularly for shorter horizons like renovation or bridge financing — areas where variable pricing offers better cashflow alignment.

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Expert Insight

“This isn’t a free-fall in rates — it’s a gradual reset,” says Megan Holloway, a mortgage broker based in Langley. “Borrowers should still stress-test their budgets. Even a half-point swing in variable rates can erase the recent savings.”

Financial analysts also warn that bond market volatility — tied to U.S. inflation prints and commodity prices — could add noise through Q1 2026. In BC, where average home values exceed $900,000, even small rate moves amplify affordability risks.

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Why It Matters

• BC has the nation’s highest share of variable-rate mortgages (≈ 43 % of new originations per CMHC).
• Every 0.25 % change in the prime rate affects payments by ≈ $120 per month on a $600,000 loan.
• The province’s high debt-to-income ratio makes mortgage costs a critical economic lever.

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British Columbia’s mortgage market is finally breathing a little easier. Variable rates at ~3.5 % and fixed terms below 4.25 % won’t transform affordability overnight, but they do signal a stabilizing trend after two years of tightening. Homebuyers and renewals should use this moment to review terms, budget cushions, and switching options before lenders tighten spreads again.

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