bringing it down to 3%<\/a>, as it said inflation is sitting around its 2% target while the economy picks up speed.<\/p>\nRatehub.ca mortgage expert Penelope Graham said that decision should lead to lower variable mortgage rates across most Canadian lenders.<\/p>\n
Calculations conducted by Ratehub indicate that a homeowner who put a 10% down payment on an average priced home in Canada \u2014 $676,640 as of December 2024 \u2014 would pay around $87 less per month with a five-year variable rate.<\/p>\n
Fixed mortgage rates are also set to decrease slightly as bond yields ticked down to the 2.8% range following the central bank’s announcement, but Graham said investor concerns over potential inflation will prevent any “dramatic discounts” in the near future.<\/p>\n
“Those who currently have a variable mortgage rate will see either their monthly payment lower if they have an adjustable-rate mortgage, or the portion of their payment servicing interest costs decrease, if they\u2019re on a fixed payment schedule,” she said in a statement.<\/p>\n
Ratehub’s calculations show that someone with a variable rate mortgage at 4.45% amortized over 25 years, who pays $3,458 per month, would see that drop to 4.2% and $3,371 in monthly payments. That would mean paying $1,044 less in mortgage payments over a full year.<\/p>\n
For every quarter-percentage-point decrease, a homeowner with a variable-rate mortgage can expect to pay approximately $15 less in monthly payments per $100,000 of mortgage, said Victor Tran, a mortgage and real estate specialist at Ratesdotca.<\/p>\n
He said the cut comes during a time of economic uncertainty and room for growth in national home sales activity.<\/p>\n
“Each successive rate decrease is good news for homeowners and those renewing mortgages,” Tran said in a statement.<\/p>\n
“While the housing market is showing some signs of life, it\u2019s far from the rush predicted when rates began to decrease. Buyers are currently well-positioned to take the time they need to find the right home and can make offers conditional on financing and inspections.”<\/p>\n
Since borrowing costs peaked in August 2023, a homeowner who put a 10% down payment on an average priced home with a five-year variable rate would have seen their monthly mortgage payment decrease by $685, according to Ratehub’s calculations.<\/p>\n
At the peak, the best five-year variable rate was 5.95%. Amortized over 25 years, monthly mortgage costs on a $650,140 home would have totalled $3,842 \u2014 a figure that has now fallen to $3,157 with a variable rate of 3.95%.<\/p>\n
Phil Soper, president and CEO of Royal LePage, said the Bank of Canada’s latest move will further increase borrowing capacity for homebuyers.<\/p>\n
“This latest decrease arrives just before the spring housing market when demand typically picks up, which should spur buying and selling activity in the weeks ahead,” he said.<\/p>\n
“However, the looming promise of hefty tariffs by the United States government is a source of uncertainty for the central bank and consumers alike.”<\/p>\n","protected":false},"excerpt":{"rendered":"
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