VINE GROUP MARKET COMMENTARY

The New World Order: Navigating Your Mortgage Strategy Amid Uncertainty.

April 2025

In the current fast-changing economic climate, flexibility is everything—especially when it comes to your mortgage. With inflation heating up, global trade tensions rising, and a Canadian federal election just months away, we’ve entered a period of economic uncertainty unlike anything we've seen in recent years. Whether you’re a homeowner or planning to buy, adapting will be key in 2025.

The Bank of Canada recently cut its key rate to 2.75% but warned that it will move cautiously from here. February’s 2.6% inflation reading—driven partly by the end of a federal tax break—has complicated the path forward. At the same time, rising U.S. tariffs and Canada’s retaliatory responses are creating ripple effects throughout the economy, with potential consequences for prices, jobs, and consumer confidence.

Layered on top of all this is a new global landscape—a shift toward economic protectionism and realignment of trade relationships, often called the “New World Order.” This adds another layer of unpredictability, especially for a trade-dependent country like Canada. And with the federal election around the corner, housing policies, tax structures, and government priorities could all shift dramatically.

Why flexibility matters now more than ever

In uncertain times, chasing the lowest rate isn’t always the smartest move. A rock-bottom rate can come with hidden restrictions—limited prepayment options, significant penalties, or lack of portability—that could cost you far more if life or the market shifts. A flexible mortgage solution gives you the breathing room to adapt, whether that’s refinancing, breaking early, or adjusting payments. With so many unknowns ahead, your mortgage shouldn’t box you in—it should be built to move with you.

Trade War Impacts on Canadians

For Canadians, the trade war with the U.S. affects everyday life primarily through higher prices, job uncertainty, and economic slowdown. Here are the key items and sectors that will directly impact Canadian consumers:

1. Higher Prices on Everyday Goods

Food & Groceries – Tariffs on agricultural goods like dairy, beef, and pork could lead to
higher grocery bills.
Imported Electronics & Appliances – Due to higher manufacturing costs, Laptops,
smartphones, and household appliances (fridges, stoves) may increase in price.
Alcohol & Wine – Canadian wines, whiskey, and craft beers could see price hikes due to U.S. tariffs.

2. Housing & Mortgage Costs

Home Prices & Construction Costs – Tariffs on steel, aluminum, and lumber mean higher costs for new homes, renovations, and infrastructure.
Mortgage Rate Uncertainty – Economic instability can impact interest rates, making borrowing more expensive or unpredictable.

3. Job & Wage Uncertainty

Manufacturing & Auto Industry – Workers in factories and car plants could face job losses or wage freezes due to disrupted exports.
Agriculture & Farming – Farmers may earn less for products like beef, pork, and grain, leading to financial strain in rural areas.
Retail & Consumer Goods – Companies facing higher costs may cut jobs or reduce hours for employees in retail, sales, and distribution.

4. Travel & Transportation

Gas Prices – Trade tensions and tariffs on oil and energy could lead to fluctuating fuel prices, impacting commuting and travel costs.
Flights & Tourism – Travel to and from the U.S. may become more expensive due to economic uncertainty and a weaker currency.

5. General Economic Uncertainty

Weaker Canadian Dollar – A trade war can weaken the loonie, making U.S. goods, online shopping, and vacations more expensive.
Reduced Business Investment – Companies holding off on hiring and expansion could lead to slower wage growth and fewer job opportunities.

Download the Market Commentary PDF to continue reading

For any mortgage questions and referrals please contact Tyler:

Tyler Lipinski, Mortgage Agent Level 2

647.868.1427 | tyler@vinegroup.ca

555 Bloor St. E., Toronto, ON M4W 1J1

VINE GROUP MARKET COMMENTARY - April 2025