This morning the Bank of Canada made its final announcement of the year and as expected, the Overnight Target Rate which affects the Prime Rate will remain unchanged.

What this means to you as a Home Buyer or Home Owner…if you have a Variable Rate for your mortgage or line of credit, your payment and interest rate will NOT change.

The Overnight Target Rate is what is used by all the banks across the country to set their Prime lending rate. When you have a Variable Rate Mortgage, it is tied to the Prime Rate unlike a Fixed Rate which is set at the start of your mortgage and does not change through the term. Those that choose the Variable Rate, usually do so in order to take advantage of a floating market so that when rates drop, so does the payment and the overall interest costs. Being in a Fixed Rate, it stays the same no matter what the market does after your mortgage completes.

It all depends on comfort and risk tolerance and there is no right or wrong answer to what is right for you. The best thing to do is get the facts and ensure you are working with a professional to get this information and not to solely rely on family, friends and co-workers as their situation will be different than yours so gather the facts and choose what is best for you and your personality. The last thing you want or need is to be kept up at night worrying about mortgage rates so if that’s your personality, a Variable Rate may not be for you.

So for todays announcement, the BoC feels like the economy is not in need of a further cut with unemployment numbers improving last week despite the uncertainty with tariffs and trade policy being a little unstable.

If you would like more detail and to see what DLC’s economist Dr. Sherry Cooper has to say CLICK HERE

There are always lots of questions surrounding this as it can be confusing and overwhelming to understand interest rates and how it all works, so lean on us. It’s our job to be the expert and explain it to you in ways you can understand. Drop a comment, call the office or text me directly.
Have a great Wednesday and enjoy your day ✌☕