Global News ~ June 6th, 2024
The Bank of Canada’s first interest rate cut in over four years on Wednesday will have a “psychological” impact on the Canadian housing market, but will likely not be enough to meaningfully improve affordability, experts say.
The Bank of Canada cut its key policy rate, which informs the rates Canadians pay on loans like mortgages, by 25 basis points to 4.75 per cent.
“Canadians have not had a rate cut from our central bank since the early days of the pandemic,” says James Laird, co-CEO of Ratehub.ca. “This is a huge move that we are now into a declining rate environment.”
Impact on variable, fixed mortgage rates
In general, the higher the Bank of Canada’s benchmark rate sits, the more Canadians who are taking out or renewing mortgages will pay on a monthly basis. Lenders in Canada base the rates they are offering on many mortgages and other loans on their prime rates, which move in concert with the central bank’s rate.
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