How Canada’s Spending Trends Are Shaping Mortgages and the Economy in Peterborough, Ontario

Household spending in Canada has shown surprising resilience despite recent economic headwinds. Consumer behaviour is being pulled in two directions — supported by lower interest rates but constrained by lingering inflation and higher living costs. The Bank of Canada began lowering its policy rate from a peak of 5% in June 2024. With the typical 12–24-month lag before monetary changes fully impact the economy, the effects of this easing are still being felt.

This gradual shift has kept household spending relatively stable through the first months of 2025. In fact, provincial retail sales were up between 3% and 8% (in nominal terms) through July compared to the same period last year. Much of that growth stems from vigorous consumer activity in late 2024, which has now levelled off but continues to provide a stable foundation for local economies, such as Peterborough, Ontario.

What This Means for Mortgages in Peterborough

For homeowners and buyers in Peterborough, the current environment presents both opportunities and challenges. The Bank of Canada’s rate cuts are slowly translating into lower mortgage rates, making borrowing more affordable for those looking to purchase, refinance, or renew their mortgage. As a leading Mortgage Broker in Peterborough, Ontario, Mike Cara notes that this trend could open the door for many households to reduce monthly payments or access equity for home improvements or debt consolidation.

With mortgage affordability improving, the local housing market is expected to experience renewed activity as we head into late 2025. Buyers who were previously priced out during the 2023–24 rate peak are beginning to re-enter the market, and homeowners nearing renewal are finding more competitive options than they did just a year ago.

Balancing Rate Relief with Inflation Pressures

While falling interest rates offer welcome relief, ongoing consumer spending has the potential to slow the decline in inflation, particularly in sectors such as housing, energy, and groceries. This means Peterborough residents could continue feeling the squeeze on daily essentials even as mortgage rates improve. The Bank of Canada is closely monitoring this dynamic, ensuring inflation moves sustainably toward its 2% target before any further rate cuts are implemented.

For the average Peterborough household, this creates a balancing act: mortgage payments may ease, but other costs could remain sticky. A skilled local mortgage broker can help navigate this environment by identifying custom mortgage solutions that protect homeowners against future rate swings.

The Local Outlook: Steady Spending Supports a Gradual Recovery

Locally, steady consumer spending has been a lifeline for Peterborough’s economy, supporting small businesses, retail employment, and housing-related industries. However, with spending growth expected to flatten in 2025, much of the city’s economic momentum will depend on how effectively lower interest rates spark renewed confidence and homebuyer activity.

As monetary policy continues to ease through 2025, Peterborough is well-positioned for a measured but sustainable recovery. Lower mortgage rates should help stabilize the real estate market, while continued consumer spending ensures the region avoids a sharp downturn.

Bottom Line:
The combination of resilient household spending and gradual rate cuts provides cautious optimism for Peterborough’s housing market. For local homeowners and first-time buyers, now is the time to explore mortgage options with an experienced professional who understands both the national economic backdrop and regional market dynamics.

➡️ Contact Mike Cara, Mortgage Broker in Peterborough, to discuss how the latest rate changes could impact your home financing strategy and monthly budget.