Date: January 29, 2025
Category: Blogs,Mortgage Tips & Advice,Newsletter
🚨BREAKING NEWS 🚨
Bank of Canada Lowers Rates Again – What You Need to Know
The Bank of Canada (BoC) has cut the policy rate by 25 basis points (0.25%), bringing it down to 3.00%. This is the sixth consecutive rate cut since June 2024.
Why Did the BoC Cut Rates?
- Trade Conflict Concerns: The potential economic challenges arising from a proposed 25% tariff on all Canadian imports by the United States are a major factor in today’s decision. Tariffs such as these could have a “dramatic” impact on Canada’s already weakened economy.
- Economic Underperformance: Despite inflation remaining around the 2% target, the Canadian economy continues to operate below its potential, prompting the need for further monetary stimulus to support growth.
How Does This Affect You?
- Reduced Borrowing Costs: Lower interest rates on mortgages, loans, and lines of credit. However, the impact on fixed-rate mortgages may be less immediate, as these rates are often influenced by longer-term bond yields.
- Lower Savings Returns: Those with savings in interest-bearing accounts might see reduced returns. Take some time to review your financial plans and work through your budgeting, savings, and investment strategies.
What’s Next?
- Upcoming Rate Announcement: The Bank of Canada has scheduled its next interest rate announcement for March 12, 2025.
Your Action Plan:
Review Your Financial Situation:
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- Approximately 1.2 million mortgages are up for renewal in 2025.
- That’s an estimated $400 billion+ in mortgages.
- Now is the time to review your personal situation and make plans for your renewal.
- Many of these mortgages were secured at rates below 3% or even below 2%, making renewal strategies one of the most important aspects of today’s mortgage renewals
Consider Opportunities:
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- Let’s have a frank conversation about budgeting.
- Variable/adjustable vs. fixed-rate mortgages—what’s best for you?
- Ensure your decisions align with your long-term financial goals.
Prepare for Potential Volatility:
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- The economic environment remains uncertain.
- Building an emergency fund and maintaining financial flexibility can provide a buffer against unforeseen changes.
- If your mortgage is up for renewal, this may be the time to add a line of credit to your home as a backup. Let’s discuss.
We are committed to keeping you updated on these developments and assisting you in navigating the evolving economic landscape.
Should you have any questions or need personalized advice, please do not hesitate to reach out.
Talk soon,
Ana
Mortgages can be complicated; we are here to help you make “cents” of it.
We focus on Mortgage Solutions, Period!
To learn more connect with Ana Cruz 905.870.0513 or email at ana@askanacruz.ca