The Bank of Canada is widely expected to deliver a 25-basis-point rate cut on September 17, restarting its easing cycle after a summer pause.

Ali Jaffery, an economist at CIBC Capital Markets, argues Canada’s case for rate relief is stronger than in the U.S., where the Federal Reserve is also preparing to lower rates but faces a very different economic backdrop.

“Although the market isn’t convinced, we see a stronger case for rate cuts in Canada than in the U.S.,” Jaffery wrote. “The American economy is just starting to show some signs of slack, whereas Canada has moved deeper into slack conditions throughout the year, with a real-time output gap closer to -1.5%, just a few threads above recession.”

That weakness has already shown up in the jobs market. Canada shed 65,500 positions in August, pushing unemployment to its highest level in nine years outside the pandemic. GDP contracted by 1.6% in the second quarter, hit by U.S. tariffs on Canadian exports.

“Enough dust has also settled to allow Governor Macklem to focus on what lies ahead and be less data-dependent,” the CIBC report added, while noting the global backdrop remains challenging and fiscal policy is unlikely to provide much near-term relief.

The weakness in Canada’s economy also means there is plenty of unused capacity, giving the Bank of Canada more room to look through temporary price pressures. Headline inflation is near target and businesses’ expectations remain steady. Some of the forces that pushed prices higher earlier, including counter-tariffs and a weaker loonie, have now reversed.

Jaffery says this gives Governor Tiff Macklem scope to take a more forward-looking approach to monetary policy.

The bank is expected to leave the door open to more cuts, especially if the next inflation reading shows little sign of heat. That report arrives Tuesday, just a day before the rate decision. The consensus forecast expects headline inflation to rise back up to 2.0% in August from 1.7% in July, mostly because of base effects. But with the monthly number essentially flat and core measures steady, the data isn’t expected to stand in the way of the BoC restarting rate cuts.

Fed cut expected, mortgage rates reacting

The Federal Reserve is also expected to cut rates this week, but largely to bring policy closer to neutral rather than to address urgent economic weakness. U.S. payroll growth has slowed, yet the 4.3% unemployment rate remains close to the Fed’s long-run estimate, and wage growth has re-accelerated toward 4%. That leaves less justification for back-to-back moves.

Markets, however, are already responding, with U.S. mortgage rates dropping 15 basis points last week to 6.35% — their lowest in nearly a year, according to Freddie Mac data. Treasury yields also briefly slipped below 4% for the first time since April, reflecting investor bets that the Fed will cut more aggressively in the months ahead.

In Canada, bond yields have also edged lower, with the Government of Canada five-year yield back in the 2.70% range for the first time since May. That has put downward pressure on fixed mortgage rates, with some five-year terms now priced below 4% again. The shift has already prompted a round of rate cuts by numerous lenders, including RBC.

Market expectations rising

A Reuters poll last week found nearly 80% of economists expect the Bank of Canada to trim its rate by 25 basis points, with most also looking for at least one more cut before year-end. Markets have already priced in Wednesday’s move, and the focus has shifted to how far the easing cycle will ultimately go.

For borrowers, the shift is already translating into modest improvements in interest costs. Variable-rate holders would see monthly payments ease if the central bank delivers as expected, while fixed-rate borrowers are benefiting from lower bond yields feeding into mortgage pricing.

Why some say the BoC should wait

Not all economists are convinced the Bank of Canada should press ahead with rate cuts.

Derek Holt, head of capital markets economics at Scotiabank, said that while the case for easing has strengthened with weaker growth and slack in the economy, the risks of moving too quickly remain.

“Excess supply conditions could make it more challenging to steer inflation to land on 2% without undershooting over time,” he wrote, adding that “high uncertainty around projections and inflation risk merit high caution toward overdoing it on the policy rate while retaining the real possibility that relief could be temporary before hikes return.”

He cautioned that while markets are giving the Bank of Canada a “free pass” to cut, the central bank may not want to overdo it, since any relief “could be temporary before hikes return.”

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Last modified: September 13, 2025

Lenders evaluating residential properties often overlook the influence of surface-level features that directly affect valuation outcomes. Flooring is one of the first elements an appraiser notices, often shaping their perception of a home’s overall maintenance, quality, and appeal. 

Poorly chosen or inconsistently installed flooring materials can introduce uncertainty that undermines final estimates. Loan originators, brokers, and underwriting teams benefit from understanding how floor decisions interact with equity, risk, and return.

Material type signals value expectations

Your flooring can impact your home’s resale value, and hardwood flooring consistently performs well in appraisals because it indicates quality. In contrast, low-cost laminate or worn carpet often triggers downward adjustments due to replacement timelines and buyer resistance. 

Appraisers consider not only surface appearance but also what the material suggests about long-term upkeep. One way flooring choices affect mortgage appraisals is by establishing initial impressions that align—or conflict—with neighborhood expectations. 

Installation quality leads to confident appraisals

Perfectly installed flooring supports positive condition ratings used to model risk exposure. Appraisers look closely at seams, alignment, edge work, and floor levelness when evaluating how well a home has been cared for. Uneven transitions or visible shortcuts often reflect broader neglect, which weakens confidence in collateral stability.

READ MORE: UAD 3.6: How mortgage lenders should prepare

Appraisal adjustments often stem from observable craftsmanship, not just raw materials. Lenders who understand that flooring quality signals broader property management patterns can better anticipate report discrepancies.

Inconsistencies create lending risk

Another way flooring choices affect mortgage appraisals is through value volatility caused by appraiser discretion. Small deviations in flooring evaluations can produce substantial loan-to-value shifts that challenge internal underwriting targets.

Even when two nearby homes have identical flooring, subjective appraisal outcomes can disrupt the financing process. One appraiser may assign added value to new tile installations, while another may focus on floor plan limitations. Inconsistent appraisals can cost lenders billions, and variations force lenders to balance borrower expectations with appraiser interpretation. 

Flooring style shapes functional appeal

Today’s homebuyers favor open layouts and clean visual lines, and flooring transitions play a central role in achieving that look. Disjointed materials between rooms or outdated styles can disrupt visual flow, triggering concerns about layout cohesion. In contrast, modern plank widths, uniform tones, and strategic installation patterns elevate both appearance and utility.

Lenders tracking resale potential should recognize how flooring impacts marketability, not just cost. When future sales depend on perceived livability, flooring consistency becomes a functional asset.

Neighborhood standards determine price tag

Premium floors don’t always translate into higher appraisals if surrounding properties don’t match that upgrade level. Overspending creates a valuation mismatch that can restrict financing flexibility or delay approval. In some cases, basic but well-maintained flooring outperforms more luxurious options simply because it mirrors local norms.

Appraisers prefer properties that reflect what buyers expect within the area’s pricing tier. Misaligned flooring value introduces appraisal gaps that put loan officers and servicers in challenging positions. Successful lending decisions require awareness of how flooring choices interact with perceived value and appraiser judgment.