Posted On
Jul 25, 2024
Yesterday, the Bank of Canada (BoC) lowered its benchmark rate by 0.25% to 4.50%, offering rate relief to consumers and businesses.
Important: This only affects variable rates. Fixed rates won't drop by 0.25%.
What Does This Mean for You?
- Most banks/lenders will now have their Prime Rate at 6.70%
- Variable rate mortgages and lines of credit will see a 0.25% decrease, saving approx $15/month per $100,000 borrowed
- Example: $400,000 loan saves $60/month
- Important: This rate decrease does not directly impact fixed rates. Fixed rates won't drop by 0.25%
Why The BoC Lowered The Rate:
- Canada's inflation dropped to 2.7% in June, from 2.9% in May
- U.S. inflation dropped to 3% in June, from 3.3% in May
- Increased unemployment rates, meaning more job loss
- Decreased consumer spending, showing consumers are tightening budgets