2024-06-11 | 10:25:16

The Bank of Canada lowered it’s Overnight Rate last week by .25%, which has lead the retail banks to drop their ‘Prime Rate’ to 6.95%. How does this affect you? 

• If you are on an adjustable rate mortgage where your payments fluctuate with any changes to the Prime Rate, your mortgage payment will be lower by about $15 next month per $100,000 of mortgage amount
• If you are on a variable rate mortgage where your payments don’t change, about $20 more of your payment will be going to principal per $100,000 of mortgage amount starting this month
• If you are carrying a balance on a home equity line of credit (HELOC), your minimum payment is going down by about $10 per $50,000 of outstanding amount owing

It is a step in the right direction. Inflation has been softening for months now, with the largest driver of inflation being mortgage interest costs and rent. Lower interest rates will take some time to have a noticeable affect on actual housing costs, but with approximately 60% of Canadian mortgages up for renewal in the next 24 months, any decrease is good news. Expect more cuts in 2024.

As always, if you have any questions about your particular mortgage situation, call or email me at any time. I will be happy to put together a quick review to ensure you are saving the most amount of your hard-earned money as possible.

Many thanks,…Patrick

905-299-4665

patrick@teamdugganmortgage.com