Bank of Canada Lowers Interest Rate to 3.75%: What It Means for You

Big news from the Bank of Canada! On October 23, 2024, they announced a drop in the key interest rate to 3.75%. That’s a change of 50 bps from the previous 4.75%. This shift is part of the Bank’s plan to get inflation under control while keeping the economy on track.

Why the Rate Cut?

With inflation now back around the 2% target, the Governing Council decided to reduce the policy rate by 50 basis points to support economic growth and keep inflation close to the middle of the 1% to 3% range. If the economy evolves broadly in line with our latest forecast, we expect to reduce the policy rate further.

What Does This Mean for You?

For those of you with variable-rate mortgages, you could see some relief! Your payments may go down a bit thanks to this rate cut (approximately $30 per month for every $100k of mortgage). If you’re locked into a fixed-rate mortgage, there won’t be an immediate change, but it could be a good time to look at refinancing options.

If you’re thinking of buying a home, this drop in interest rates could make borrowing more affordable, potentially lowering your monthly payments. Just keep in mind that the housing market is still driven by supply and demand, so prices could stay competitive as more buyers jump in.

What Should You Do Now?

With lower rates on the table, now might be the perfect time to review your mortgage situation. Whether you’re thinking about buying, refinancing, or just curious about your options, let's chat and see how these changes could benefit you.