The Bank of Canada announced another 25-basis-point rate cut, bringing its policy rate down to 3.00%. This marks the sixth consecutive rate reduction, signaling ongoing efforts to stimulate economic growth.
For borrowers, this means lower borrowing costs, particularly for those with variable-rate mortgages and loans tied to the prime rate.
What’s Changing?
We expect most lenders to lower their prime rates to 5.20%. However, TD Bank’s mortgage prime rate—which tends to be slightly higher—is likely to sit at 5.35%.
Here’s what the rate cut means for different types of borrowers:
✅ Variable-Rate Mortgage Holders:
If you have a fixed payment, a larger portion of your monthly payment will now go toward paying off your principal, helping you build equity faster. If your payments adjust with the prime rate, your monthly mortgage payment should decrease by about $14 per $100,000 of mortgage debt (based on a 25-year amortization).
✅ Fixed-Rate Mortgage Holders:
No immediate impact—your mortgage rate and payments remain unchanged.
✅ Other Loans Tied to Prime Rate:
If you have a personal loan, line of credit, or home equity loan, you’ll likely see lower interest costs in the coming weeks.
The Bank of Canada’s next rate decision is March 12, and economic data will play a crucial role in determining whether further rate cuts are coming.
Get in touch to discuss how this rate cut impacts your Mortgage Plan, and evaluate your options moving forward.
Sean Santoro
Mortgage Agent, L2
519.551.5804