Some good news! The Bank of Canada has delivered its second straight half-point rate cut, bringing the policy rate down to 3.25%—the fifth consecutive cut since June. This move was widely expected by markets and economists, reflects signs of a slowing Canadian economy.

Governor Tiff Macklem explained that two large cuts were necessary because economic growth no longer needs to be restricted. However, he hinted that future rate cuts will likely be smaller.

Variable Mortgage holder & Heloc holders will see a dcrease in their interst rate.

– Bank of Canada’s Policy Rate: 3.25% 
– Bank’s Prime Rate: 5.45% (TD Bank: 5.6%)

Adjustable Rate Mortgage Holders: Expect an automatic payment decrease of approximately $29.36 per $100,000 owed.

Variable Rate Mortgage Holders (fixed payment): Your payment will remain the same, but you’ll pay less in interest and more towards the principal.

Looking ahead, the Bank predicts slower economic growth next year, partly due to the federal government’s reduced immigration targets.

 This was the final interest rate announcement of 2024. Next Announcement January 29th, 2024

Info courtesy of Darcy Doyle at The Mortgage Professionals: darcy@themortgageprofessionals.ca https://themortgageprofessionals.ca/