Bank of Canada Cuts Policy Rate Again: What This Means for Your Mortgage and Loans

Today, the Bank of Canada reduced its policy rate by 50 basis points (0.50%), bringing it down to 3.25%. This marks the fifth rate cut this year, paving the way for lower borrowing costs for Canadians. Lenders are expected to respond by reducing their prime rates, with most forecasted to drop to 5.45%, while TD Bank’s mortgage prime rate may fall to 5.60%.

For the full details, check the official Bank of Canada statement here.

What Does This Mean for You?

1. Variable-Rate Mortgages

• Lower Interest Costs: With the anticipated drop in prime rates, you’ll soon see reduced interest charges.

• Fixed Payments: If you have fixed payments, more of each payment will go toward reducing your mortgage principal.

• Adjustable Payments: If your payments fluctuate with the prime rate, you can expect a lower monthly payment. For example, a $100,000 mortgage loan may see a reduction of $28/month (based on a 25-year amortization).

2. Fixed-Rate Mortgages

• No immediate changes. Your payments remain the same since your rate is locked.

3. Loans Tied to the Prime Rate

• Personal loans and lines of credit will also benefit from lower interest rates, saving you money on interest charges.

Looking Ahead

The Bank of Canada’s next rate decision is scheduled for January 29, 2025. The economic data leading up to this decision will determine whether another rate cut is on the horizon.

This latest cut offers a unique opportunity for homeowners and borrowers to reassess their financial strategies.

How Can I Help You?

As an award winning real estate professional and mortgage associate, I’m here to guide you through these changes. Whether you’re looking to refinance, renew your mortgage, or understand how this impacts your financial plan, I’m just a call away.

Let’s chat about how you can make the most of today’s lower rates. Reach out anytime—I’d love to help!

About Joshua LeBlanc

With over a decade of experience, Joshua LeBlanc is a trusted mortgage associate and real estate expert based in Estevan, Saskatchewan. As an award-winning top producer, Joshua has helped countless clients navigate the complexities of mortgages and real estate investments.