Bank of Canada Rate Cut and Its Impact on Mortgages

The Bank of Canada (BoC) has cut interest rates following a cool inflation reading for June. This decision will likely lead banks to lower their prime lending rates to 6.7%, impacting variable mortgages and lines of credit.

The Bank of Canada in Ottawa. PHOTO: ASSOCIATED PRESS

Immediate Savings for Variable-Rate Holders Adjustable-rate mortgage holders will see immediate payment reductions, saving approximately $15 per month for every $100,000 borrowed. Fixed-rate mortgage holders won't see immediate changes, but those shopping for new or renewing fixed rates might benefit indirectly as fixed rates are influenced by bond market reactions.

Housing Market Implications The rate cut may have minimal immediate impact on the housing market, though some experts anticipate increased listings and potential price rises as rates continue to fall.