The Bank of Canada just announced its fifth rate cut of the year, lowering the policy rate by 0.50% to 3.25%. This brings the total drop in 2024 to 1.75%, thanks to three smaller cuts of 0.25% earlier in the year and two larger 0.50% cuts recently. Most lenders are expected to lower their prime rates to 5.45%-5.60%, which is great news for anyone with a variable-rate mortgage or line of credit. Fixed-rate mortgages, however, won’t see immediate changes since they’re tied to bond yields, which may shift in the future depending on market conditions.
These rate cuts have been part of a plan to help boost the economy and ease some financial pressures, like high housing costs and job market ups and downs. With this latest drop, we’re already seeing more buyers getting pre-approved and making offers. As we head into 2025, the Bank of Canada will keep an eye on how these changes are working before deciding on the next steps. The next rate announcement is scheduled for January 29, so if you’re thinking about buying, refinancing, or renewing your mortgage, now is a great time to review your options and get advice tailored to your goals.