Date: March 12, 2025

Category: Blogs,Mortgage Tips & Advice,Newsletter

🚨BREAKING NEWS 🚨

Bank of Canada Lowers Policy Rate to 2.75%

On March 12, 2025, the Bank of Canada lowered its policy rate by 0.25%, bringing it down to 2.75%. This is the seventh consecutive rate cut since June 2024. The prime rate—what lenders use to set variable mortgage and line of credit rates—remains at 4.95%.

How This Affects You as a Borrower

✔ Adjustable-Rate Mortgages & Lines of Credit – Your monthly payment will decrease, giving you immediate relief.

✔ Variable-Rate Mortgages – Your interest costs will go down, meaning more of your payment goes toward principal—but your monthly payment stays the same.

✔ Fixed-Rate Mortgages – Fixed rates are based on bond markets, not directly on the Bank of Canada’s rate. If bond yields drop further, fixed rates may follow—but today’s announcement does not immediately impact fixed mortgage rates.

✔ Home Affordability – As rates start to trend lower, buyer confidence may increase, which could push home prices higher over time.

Understanding the Difference Between the Bank’s Policy Rate and Prime Rate

Bank of Canada’s policy rate = what banks pay to borrow money.
Prime rate = what you pay on variable mortgages and lines of credit.

The prime rate is typically about 2% higher than the Bank of Canada’s rate because banks add their own costs and profit margins.

This is why, even though the BoC rate is 2.75%, the prime rate remains at 4.95%.

 

What We Can Expect Moving Forward

📌 The Bank of Canada has hinted at more rate cuts in 2025, but future decisions depend on inflation and economic conditions.

📌 If more cuts happen, borrowing costs will continue to ease, making this a good time to review your mortgage strategy.

📌 Waiting for deeper cuts? Keep in mind that as rates drop, home prices may rise, impacting affordability. It’s a double-edged sword.

1.2 Million Mortgages Are Renewing This Year – Don’t Blindly Accept Your Renewal!

Over $901 billion in mortgages are renewing in 2025—if yours is one of them, you have choices.

Lenders won’t always offer you the best rate upfront. Let’s review your renewal options and ensure you’re getting the best deal possible.

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