What Canada’s Latest Jobs Report Means for Mortgage Rates in 2025 | Red Deer Mortgage Insights
December 9, 2025 | Posted by: Kelly Lukens - Trusted Red Deer Mortgage Broker
The Government of Canada’s latest December 2025 jobs report offers important clues about where mortgage rates may be headed in the new year. While most Canadians do not read full economic releases, they do care about one thing, whether interest rates are going up, down, or staying put. The December employment numbers give mortgage shoppers in Red Deer a clearer picture and the trends are encouraging for anyone hoping for better affordability in 2025.
What did the December 2025 jobs report reveal?
December’s labour market data showed moderate job gains paired with a noticeable increase in the unemployment rate. This combination signals a cooling job market across Canada, including here in Alberta. Wage growth also eased compared to earlier in the year, which helps bring inflation pressure down. These three signals together are exactly what the Bank of Canada watches when deciding future rate movements.
When the job market cools, the Bank of Canada typically has more flexibility to reduce interest rates. While nothing is guaranteed, the December report makes additional rate cuts in 2025 more likely than they were only a few months ago.
Why does a cooling labour market matter for mortgage rates?
When job growth slows and unemployment rises, consumers tend to spend less. That reduces inflation pressure, which is the main factor keeping borrowing costs high. The Bank of Canada has already begun lowering rates, and the December data supports the idea that more cuts could happen through 2025 if these trends continue.
For Red Deer homeowners and buyers, this matters because lower policy rates eventually filter down into lower fixed and variable mortgage rates. Even a small drop in rates can create meaningful monthly savings or improve a buyer’s qualification room.
How could this impact first time buyers in Red Deer?
Red Deer has a younger population mix than many other Alberta cities, which means more future first time buyers entering the market. With the December jobs report pointing toward a softer economic environment, first time buyers may see improved affordability throughout 2025.
If you are preparing to purchase your first home, now is a smart time to start the pre approval process. Securing a pre approval gives you rate protection as the market continues shifting. You can learn more about the process here:
Red Deer Mortgage Pre Approval
What does this mean for homeowners considering refinancing?
Refinancing becomes increasingly attractive when rates begin trending downward. With the December report showing reduced inflation risk, many Red Deer homeowners are revisiting their refinancing plans. Lower rates in 2025 could help reduce monthly payments, access equity, or consolidate higher interest debt.
If your mortgage is up for renewal in the next 12 to 18 months, or if you want to explore equity take out options, you can review the refinancing process here:
Mortgage Refinancing and Equity Take Out in Red Deer
Will mortgage renewals become more affordable in 2025?
Many Red Deer households have been carrying higher payments for the past year, especially if their mortgage renewed during the peak of interest rates. With the December jobs report indicating further economic softening, the odds of more rate relief in 2025 increase. This is welcome news for anyone approaching a renewal.
If your mortgage comes due soon, locking in early or reviewing multiple lenders can save you thousands over the next term. You can find more renewal details here:
What should home buyers do now that the labour market is shifting?
With market conditions improving and rate expectations easing, buyers should consider taking the following steps to stay ahead of the curve:
- Start a pre approval to lock in rate options before anything changes
- Gather income and tax documentation early so you can move quickly
- Review different mortgage terms to see how potential rate cuts may benefit you
- Stay connected with a local mortgage expert for real time updates
Local conditions matter too. Red Deer continues to see steady population growth from surrounding rural communities, and more families relocating for affordability compared to Calgary and Edmonton. This helps support stable home demand even in softer economic cycles.
If you are thinking about purchasing a home in 2025, you can explore available mortgage options here:
Home Purchase Mortgages in Red Deer
How should Red Deer residents time their next mortgage move?
Timing matters more than ever because the market is in transition. Rates may decrease, but lenders often adjust at different speeds. Acting early gives you more flexibility and reduces stress.
Whether you are purchasing, renewing, or refinancing, starting the conversation now ensures you benefit from upcoming changes rather than reacting to them after the fact. You can learn more about how we support clients here:
About Kelly Lukens, Trusted Mortgage Broker in Red Deer
Are there signs the Bank of Canada may cut rates again in 2025?
While nothing is guaranteed, several indicators from the December jobs report support the possibility of additional rate cuts:
- Unemployment increased, which reduces inflationary pressure
- Wage growth eased compared to earlier months
- Overall employment gains slowed, indicating softer demand
- Inflation has been trending closer to the Bank of Canada’s target range
These are the conditions the Bank of Canada has been waiting for. The December numbers do not promise anything, but they strengthen the argument for rate relief as the economy continues to cool.
What should Red Deer homeowners do right now?
Here are a few steps you can take immediately if you want to take advantage of favourable trends in early 2025:
- Request a pre approval to secure rate protection
- Ask about refinance scenarios if your equity position is strong
- Review upcoming renewal dates to avoid last minute decisions
- Book a consultation to explore your personalized options
The mortgage landscape is shifting quickly. Working with a local Red Deer mortgage specialist ensures you stay ahead of every change, rather than reacting to it later.
Frequently asked questions about mortgage rates and Canada’s jobs data
How does the jobs report affect mortgage rates?
A weaker labour market reduces inflation pressure, which increases the likelihood of lower interest rates. The December report showed exactly that trend.
Should I wait for lower rates before buying a home?
Waiting can help, but buyers who complete a pre approval now can lock in protection while still benefiting if rates fall later.
Do rising unemployment numbers mean a recession is coming?
Not necessarily. Slower job growth often reflects a cooling economy, which is what the Bank of Canada needs to ease borrowing costs.
Will fixed or variable rates drop first?
Variable rates usually respond first to Bank of Canada decisions, while fixed rates move with broader bond market trends. Both could improve in 2025.
When should I book a mortgage consultation?
As early as possible. Early planning protects you from sudden market shifts and opens more options when rates improve.
