Today, the Bank of Canada made a widely expected move and lowered its key interest rate by a quarter of a percentage point, bringing it down to 2.25% from 2.50%. For those of us in real estate, this is generally a welcome sign!
What This Means for You
As your realtor, here’s the simple takeaway: Lowering the key rate usually means lower borrowing costs.
• Mortgage Rates Should Follow: While banks don’t always pass the full cut on, this move puts downward pressure on the rates for new mortgages and renewals. This means the cost of borrowing money to buy a home just got a little bit cheaper.
• More Buying Power: When mortgage payments are lower, your budget stretches further. This can help buyers qualify for larger loans or simply make monthly payments feel less stressful. This is especially helpful if you’ve been waiting on the sidelines.
• A Boost for the Market: The Bank of Canada did this to support the economy, citing things like rising unemployment. A rate cut acts like an economic gentle nudge. In the housing world, lower rates tend to encourage buyers to jump in, which can increase activity in the market.
Even though inflation was a bit up last month, the Bank felt the need to support the economy. This suggests they are prioritizing stability and growth, which bodes well for having a steady market ahead.
The Bottom Line: If you were thinking about making a move this fall or winter, today’s rate cut just made your potential financing look a little better. Let’s chat about how this change affects your specific purchasing power!