Bank of Canada delivers third consecutive rate cut

September 05, 2024

This Guest Blog Brought To You By: Maryann Chase, TMG Mortgage Group

I wanted to keep you informed about the latest update from the Bank of Canada.

Yesterday, the Bank of Canada lowered the policy rate by 25 basis points, bringing it to 4.25%. This marks the third rate cut this year, which could help reduce interest costs for those with variable-rate loans.

If you’d like to dive into the details, you can read the Bank of Canada’s full statement here.

What’s next?

Lenders typically take a few days to adjust their prime rates following the Bank of Canada’s announcement.

We expect the prime rate, which affects variable-rate mortgages and other loans, to soon decrease to 6.45% at most major lenders. TD Bank, which usually has a slightly higher mortgage prime rate, should lower it to around 6.60%.

What does this mean for you?

For those with fixed-payment variable-rate mortgages, this is good news! You should see a reduction in the interest portion of your payment.

If you have an adjustable-rate mortgage, where your payment changes with the prime rate, you’ll notice a slight decrease in your next payment.

For those with fixed-rate mortgages, this rate cut won’t affect your current term or monthly payments.

Other loans tied to the prime rate, like certain personal loans or lines of credit, will also see a reduction in interest charges or monthly payments.

Looking ahead

The Bank of Canada’s next rate decision is set for October 23. Whether another rate cut will occur depends on the economic performance in the coming weeks, but markets are leaning towards another possible cut.

If you have any questions or want to discuss how this might impact your mortgage strategy, feel free to reach out. I’m here to help!

Maryann Chase
(306) 220-6906
maryann.chase@mortgagegroup.com