The Bank of Canada has lowered its key interest rate by a quarter of a percentage point to 4.75 per cent, the first cut in more than four years. Here's what it could mean for your finances
The Bank of Canada has lowered its key interest rate by a quarter of a percentage point to 4.75 per cent, the first cut in more than four years. Here's what it could mean for your finances.The Bank of Canada's benchmark rate affects borrowing costs for banks, which means they're able, but not forced, to lower their own lending rates.
Canadian banks have more flexibility in deciding to cut than they used to. Banks choose how much interest they add to the Bank of Canada rate, and that buffer has widened over the past couple of decades. Fixed-mortgage rates are determined by what happens to the bond market, which, while also affected by Bank of Canada rate decisions, is based on overall investor confidence. The market had already largely priced in the rate cut.A quarter percentage point cut doesn't translate into a major change in monthly mortgage payments. Someone with a $600,000 mortgage, 25-year amortization and a six per cent interest rate would save about $88 a month if the rate was 5.75 per cent.
Savings accounts and GICs have seen higher returns as rates rose, and could see that reverse if prime rates go down in line with the Bank of Canada.
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What the Bank of Canada rate cut means for mortgages, consumer loans and investmentsThe Bank of Canada has lowered its key interest rate by a quarter of a percentage point to 4.75 per cent, the first cut in more than four years. Here's what it could mean for your finances.
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What the Bank of Canada rate cut means for mortgages, consumer loans and investmentsThe Bank of Canada has lowered its key interest rate by a quarter of a percentage point to 4.75 per cent. Here's what it could mean for your finances.
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What the Bank of Canada rate cut means for mortgages, consumer loans and investmentsThe Bank of Canada has lowered its key interest rate by a quarter of a percentage point to 4.75 per cent. Here's what it could mean for your finances.
Read more »
What the Bank of Canada rate cut means for mortgages, consumer loans and investmentsThe Bank of Canada has lowered its key interest rate by a quarter of a percentage point to 4.75 per cent. Here's what it could mean for your finances.
Read more »
What the Bank of Canada rate cut means for mortgages, consumer loans and investmentsThe Bank of Canada has lowered its key interest rate by a quarter of a percentage point to 4.75 per cent. Here's what it could mean for your finances.
Read more »