06/05/2024
After years of seeing continuous rate hikes and holds, this morning the Bank of Canada announced a rate reduction of 25 basis points, lowering the prime rate from 7.20% to 6.95% and the target overnight rate from 5% to 4.75%. 🥳
The BoC has been cautious and waiting for inflation rates to stabilized before touching Canada’s prime rate. CPI inflation has eased up to 2.7% in April, a significant decline from it’s peak of 8.1% in June 2022. Satisfied by the previous three months downward trajectory, the Bank has agreed that monetary policy no longer needs to be as restrictive and finally proceeded with a rate reduction.
What does this mean for you?
If you have a fixed rate mortgage, this does not affect you right now.
⭐️If you have a variable rate mortgage or home equity line of credit (HELOC), this is GREAT news. You will see a much anticipated reduction to your interest rate and your mortgage payments.
While 25 basis points may not feel like a big difference, you’ll be saving just under $15 per $100,000 of your mortgage in your regular payments. Every little bit of cash back in your pocket matters! 💰
Next rate announcement is scheduled for July 24th, 2024. Any guesses?
