The Bank of Canada lowered its key interest rate again by 0.25% (25 basis points) Wednesday, bringing it down to 2.25%. This marks another step in the ongoing effort to support the economy as inflation continues to cool.
Since beginning this easing cycle in June 2024, the Bank has reduced its rate by 2.75% (275 basis points) from a peak of 5%, its highest level in over two decades.
Here’s how this week's decision could affect you:
- Variable-rate mortgages: You can expect a drop in your interest rate and monthly payments once lenders adjust their prime rates. Most major lenders are expected to move to 4.45%, with TD Bank slightly higher at 4.60%.
- Fixed-rate mortgages: There’s no immediate change today. Fixed rates are influenced more by bond yields, which may still shift based on how markets interpret the Bank’s tone and inflation outlook.
- Lines of credit and other loans tied to prime: Borrowing costs should ease slightly as prime rates move lower.
The Bank’s next rate announcement is scheduled for December 10. Between now and then, inflation and economic trends will guide whether further cuts are likely.
If you’d like to chat about how today’s rate cut could open up new options for you, I’d be happy to walk through what it means for your mortgage.