What the Bank of Canada’s Rate Cut Means for You
The Bank of Canada has made a move that could impact homebuyers across the county. On Wednesday, it cut its key interest rate by 25 basis points, bringing it down to 2.75 per cent. This marks the seventh consecutive rate cut, but uncertainty remains about what it means for the housing market.
Why Did the Bank of Canada Cut Rates
The central bank cited “pervasive uncertainty” caused by U.S. tariffs, which have weakened consumer and business confidence. With Canadians holding back on spending and businesses delaying hiring and investment.
Will This Help Homebuyers?
A lower interest rate typically benefits homebuyers, as borrowing becomes more affordable. However, experts say confidence is still shaky. Mortgage experts note that while lower rates and increased housing inventory should make it a great time to buy, economic uncertainty is making people hesitant.
What This Means for Your Mortgage
If you already have a variable-rate mortgage, you may see immediate savings. For example, a homeowner with a $621,753 mortgage on a $670,064 home (with a five-year variable rate) could see their monthly payment drop by $84. That adds up to over $1,000 in savings per year.
More Rate Cuts to Come?
Economists predict further rate cuts, with the Royal Bank of Canada forecasting rates dropping to 2.25 per cent by mid-year. If economic uncertainty continues, the Bank of Canada may take more action.
Get Expert Advice
With ongoing economic instability and the threat of additional U.S. tariffs looming, the current mortgage market comes with so much uncertainty. Whether you are buying, renewing, or refinancing, Steve D’Souza and Nathan Isherwood at Client First Mortgage Solutions are here to provide clarity and expert guidance.
Original Article – Global News – Uday Rana – March 12, 2025
