Wait for a rate cut before buying on the South Shore?

For a few weeks now, the same line comes up on almost every call: "I'm waiting for rates to drop before I buy." On paper, that's cautious. Let's look at what it actually adds up to.

On September 2, expect a hold, not a cut

The Bank of Canada left its policy rate at 2.25% on July 15, a sixth hold in a row. The next decision lands on September 2. Bond markets price in almost no chance of a cut: the odds of any change are slim, and the only move still on the table would be a small hike, not a drop. In other words, the buyer waiting for "the" September cut is waiting for something nobody is promising.

That doesn't mean rates will never move. It means building a purchase decision around an imminent cut is a bet on a timeline the Bank itself has not confirmed.

What waiting actually costs

Take a concrete number. On a $500,000 mortgage amortized over 25 years, moving from 4.09% to 3.84% changes the monthly payment by about $70. That's real, but it isn't what makes or breaks a purchase. While you wait for that $70, two things can move the other way: the price of the property you were eyeing, and the choice left on the market.

In July, across the Montreal metropolitan area, the median single-family price reached $650,000, up 4% year over year. Four percent on $650,000 is $26,000. A quarter-point rate cut does not offset a property that gains $20,000 while you wait for the right moment.

The real lever right now is choice

The market already gives you something the Bank won't: inventory. The Montreal area counted 19,790 active listings in July, 17% more than a year earlier and 9% above the historical average for July. Condos lead the rise in supply, with median selling time now at 55 days, nine more than a year ago. More choice, and properties that sit longer, is your room to move. It exists now, not in September.

Fixed, variable, or three years: you have options

If your bet really is a coming drop, there's a smarter way to play it than waiting with your arms crossed. In mid-August, the best five-year variable rate sat around 3.35%, below the five-year insured fixed at 4.09%. A three-year fixed term was around 3.89%. Variable and short-term products let you catch a future drop without staying a renter in the meantime. Every file is different, and the right choice depends on your tolerance for risk, not on a general rule.

One thing doesn't change, whatever the strategy: the stress test. The bank qualifies you at your contract rate plus two points, or 5.25%, whichever is higher. That figure sets your real budget. Get your pre-approval sorted first. It tells you what you can buy today, at today's rates, without guessing.

What it means for you

• If you're buying: don't wait for a cut nobody guarantees on September 2. Use the choice you have now, target properties listed for more than a month first, and ask a mortgage broker about variable or a short term if you believe in future drops. Arrive pre-approved, with your ceiling worked out at the stress-test rate.
• If you're selling: the buyer sometimes hesitates "until rates move." A fair starting price gets them off the fence; a price set too high confirms their wait. Selling times are stretching on the condo side, so be realistic about your timeline and your listing strategy.
• If you're investing: the plex posted a median price of $865,000 in July, up 6% year over year. If you finance, run your return at today's rate, not a hoped-for one. A building that doesn't work at 4% doesn't become good because you dream of 3.5%.

These benchmarks apply to the region as a whole, not to your street in particular. Candiac doesn't plan like Longueuil, and a first purchase isn't financed like an income property. Before you buy or sell, let's talk about your file and your real numbers. Request an evaluation or write to me, and we'll look at it together. You can also read my piece on mortgage renewal.