This past September 4th, I don’t think that anyone was surprised by the Bank of Canada’s (BoC’s) decision to cut Prime rate by another .25%, marking three consecutive meetings with a quarter-point interest rate cut. It’s great news that Bank prime now sits at 6.45%. As a mortgage agent in Mississauga, ON, I see how impactful each rate change can be for homeowners. With every quarter-percentage-point decrease, a homeowner with a variable-rate mortgage can expect to pay approximately $15 less per $100,000 of mortgage in monthly payments. For example, if you have a $500K mortgage, your payment drops by another $75/month.
Looking ahead, we anticipate more rate reductions when the BoC meets on Oct 23rd and Dec 11th this year, which could bring Prime rate to under 6%. With an aggressive variable rate discount, this could translate to a net variable rate mortgage in the high 4 percent range, with more possible rate cuts in 2025.
As your trusted Mortgage Broker at Lotus Loans & Mortgages Corp., we are here to provide professional and unbiased advice. If you or someone you know is contemplating a fixed vs. variable rate mortgage, feel free to reach out to us for guidance.