Many in the younger generations feel homeownership is growing increasingly out of reach

By Tommy Osborne

Key Interest Rate

Federal decision raises concerns regarding affordability

Jul 31, 2025 | 4:43 PM

PRINCE GEORGE – The Bank of Canada announced it is keeping its key interest rate at 2.75%, citing economic resilience amid U.S. President Donald Trump’s ongoing trade war.

“The increases we’ve seen in U.S. effective tariff rates are less than what was threatened, but they are still outside post war historical experience,” said Tiff Macklem, the Governor of the Bank of Canada.

A graph from the Bank of Canada showcasing the key interest rate drop, and then the steadiness.

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2.75% is a notable decrease from the 5% rates of 2024, but the fact it hasn’t dropped further is concerning to the younger generation, especially when it comes to home ownership.

“It’s already difficult to afford tuition to get into a college. And then on top of that, the fact that the interest rates haven’t changed, they haven’t made any differences, and housing just continues to get more and more expensive. At this point it’s a dream to own a house. Even renting is difficult,” said Holden Deley, the College of New Caledonia’s Student Union Chairperson.

“The cost just to get in, whether that’s a down payment or whatever it may be, is sky high right now. Couple that with rates that have come down slightly, but still are once again not at the bottom that we’ve seen in the past, makes it even more challenging,” added Mason Cox, the Credit Counselling Society’s Director of Counselling.

In 2019 the key interest rate was 1.75%, so even though current day has seen stability at 2.75%, Cox says stability now doesn’t undo the years of challenges caused by higher interest rates.

“The past troubles have not gone away. They’re still holding firm and while it’s not an instantaneous reaction, this will benefit individuals, there will be lower cost of borrowing, but you’re already still saddled with the previous issues coming from those extremely high rates that we were seeing in the past,” Cox said.

Deley adds compounding issues, on top of the key interest not dropping, have made the situation much more difficult. An increasing cost of living, on top of the price of homes in general increasing, all combines to create a situation that Deley says offers little hope for any prospective home owners.

“Students have to skip meals in order to be able to afford tuition, and of course, housing. There are a lot of students that have to rent or share homes with other people. Domestic students often will continue to live with their families throughout their education. I have friends that I’ve been with since high school, and they are unfortunately still with their parents, despite the fact that they have jobs in civil engineering,” Deley said.

The Bank of Canada adds future reductions in the policy interest rate are possible, which will be based on pressures from inflation and a potential weakening economy.

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