Breaking News
Bank of Canada makes JUMBO rate cut of 0.50% (Oct 23, 2024)
I wanted to give you a quick update -- today, the Bank of Canada lowered its policy rate a half percentage point, bringing it down to 3.75%, a reduction of1.25% from its peak. This is the fourth consecutive rate cut this year, and it could bring a bit of relief if you have a variable-rate mortgage or other loans tied to a bank's prime rate.
If you'd like to dive into the details, you can read the Bank of Canada's full statement here.
What’s next?
Lenders usually take a few days to adjust their prime rates after the Bank of Canada makes a move. We're expecting the prime rate to drop to around 5.95% at most lenders, while TD Bank’s prime rate should land around 6.10%.
What does this mean for you?
- If you have a variable-rate mortgage: Good news! You'll likely see lower interest costs of approximately $29.96 per $100,000, based on a 25 year amortization, soon. If your payments are fixed, more of your payment will go toward the principal. If your payments adjust with the prime rate, your monthly payment should decrease a little.
- If you have a fixed-rate mortgage: Nothing changes for now -- your payments will stay the same.
- Other loans tied to the prime rate: Things like personal loans or lines of credit will also see a drop in interest charges.
Looking ahead
The Bank of Canada's next rate decision is scheduled for December 11, 2024, and markets are already expecting another rate cut. While nothing is guaranteed, this could mean even more relief for borrowers in the coming months.
If you have any questions or want to chat about how this might impact your mortgage, feel free to reach out. I'm always happy to help!
Breaking News
Government raises CMHC mortgage cap to $1.5M & expands 30-year amortizations for first-time buyers (
The federal government today (September 17th, 2024) announced some sweeping changes to Canada’s mortgage system in an effort to improve housing affordability and access.
One of the key changes is the increase in the CMHC-insured mortgage limit from $1 million to $1.5 million. This means buyers can now qualify for a mortgage with less than a 20% down payment on homes priced up to $1.5 million, making it easier to access higher-priced properties.
This move aims to help buyers in higher-priced markets where skyrocketing housing costs have made it nearly impossible for many to qualify for insured mortgages under the previous $1 million cap.
Another major reform is the extension of 30-year amortization periods to all first-time homebuyers. This expansion builds on the government’s announcement earlier this year to offer 30-year amortizations exclusively for new builds.
The government says this change will ease the financial burden on younger buyers, allowing them to spread payments over a longer period, thus reducing monthly costs.
Both changes will come into effect December 15, 2024.
The announcement follows growing concerns about housing affordability. Deputy Prime Minister and Finance Minister Chrystia Freeland emphasized that these reforms are designed to unlock homeownership for more Canadians and address the ongoing challenges in the housing market.
“Building on our action to help you afford a down payment, we are now making the boldest mortgage reforms in decades to unlock homeownership for younger Canadians,” she said.
The government plans to introduce regulatory amendments to implement these mortgage reforms, with more details expected in the coming weeks.
If you have questions about your mortgage, how these changes may impact you or are currently shopping for a new home, please reach out to me today.