Last week, the Bank of Canada decreased their rate by 0.25% to 4.5%, resulting in a drop in the Bank Prime Rate from 6.95% to 6.70%.

What does this mean for you?

If you’re on an adjustable-rate mortgage, your payment will decrease by roughly $15 per $100,000 of your balance. For variable rate borrowers whose payments remain the same, more of your payment will go toward the mortgage balance than interest, shortening the time it takes to repay your loan (the amortization).  Line of credit borrower’s interest costs have dropped by .25% as well.

First-time buyers will have a little more borrowing power in the marketplace now.

If you’re one of the 80% of mortgage holders looking to renew in 2024 or 2025, this reduction in interest rates could make things easier for you.

Waiting to buy?

A word of caution to those waiting for rates to decrease further before buying: rates and property values don’t typically move in the same direction. While rates are trending down, $500,000 today might buy you more than it will once rates drop further and property values start rising again.

Thinking of your renewal, even if it’s still a year or more away?

In today’s rate environment, many people have questions about mortgage renewals, even if they are still a few years away. Sometimes a quick chat can provide clarity and peace of mind.

Regardless of your situation, this is welcome news for Canadians across the country.

Feel free to give me a call to check in on your situation and explore potential options. I’m always happy to help!