Bank of Canada Drops Rates a Third Time

Bank of Canada has done it again.

They've lowered the interest rate on the overnight lending rate to 4.25%. This is going to bring our prime lending rate down to 6.45%.

So for those of you who have variable rate mortgages currently, you can expect a reduction in your principal and interest payment by $15 for every $100,000 of mortgage money that you currently own.

For those who have home equity lines of credit (HELOC), you can see a reduction in your interest only costs by $20 a month for every $100,000 of mortgage money that you own on that line of credit.

Now going forward, the Bank of Canada meets again on October 23rd, as well as again on December 11th.

Tiff Macklem, the Governor of the Bank of Canada stated,

"If inflation continues to ease broadly in line with the central bank's July forecast, it is reasonable to expect further cuts in the policy rate. We will continue to assess the opposing forces on inflation and take our monetary policy decisions one at a time."

So by the end of this year, we may see ourselves closer to that 4% overnight lending rate or 6.00-6.20% on the prime lending rate.

If you have questions on how this month’s rate cut affects your situation specifically, feel free to schedule a call or you can always send me an email.

Article written by:

Cody Rowe
Senior Mortgage Consultant
Dominion Lending Centres
Modern Mortgage Group
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