It is great to have some good news to share with you on the interest rate front for once. 

Homeowners in Canada can breathe a sigh of relief today after the Central Bank cut interest rates for the first time in four years and signaled more to come, easing some pressure on variable rate mortgage holders. The Bank of Canada has cut its benchmark interest rate by 25 basis points, a decision that marks the first time its key rate has fallen since the beginning of the COVID-19 pandemic.

This is the first sign of interest rate relief in four years for financially stretched Canadians, due to cooling inflation and weaker-then-expected economic growth in the first quarter of 2024. April inflation fell to 2.7 per cent, down from 2.9 per cent in March.

“With continued evidence that underlying inflation is easing, Governing Council agreed that monetary policy no longer needs to be as restrictive and reduced the policy interest rate by 25 basis points. Recent data has increased our confidence that inflation will continue to move towards the 2% target,” the Bank noted in its interest rate announcement.

This is good news for Canadians who are renewing their mortgages, have a variable-rate mortgage, line of credit or are carrying other types of loans. However, housing experts warn that the rate cut could spark a flurry of activity in the housing market, with those who have been sidelined by higher rates seeing this as an opportunity to re-engage in the market. And a boost in demand is often accompanied by a boost in price.

With the potential for further interest rate cuts this year, time will tell how the Canadian housing market responds. For now, enjoy the quarter-point cut!

In these trying times, if you are buying, refinancing, or renewing your existing mortgage, please reach out to me to discuss your personal situation and what options you may have going forward. 

My business continues to grow by word of mouth. Please feel free to pass along my contact information to any friends, family or colleagues who have questions about their mortgage needs.

Dave Bruynesteyn