Ottawa Mortgage Blog

On July 24th, the Bank of Canada announced its second interest rate cut in two months, reducing its overnight rate by 0.25% to 4.50%. According to the central bank, the decision comes amid signs that inflation is moderating and the labour market is slowing.

>> Learn more about June inflation numbers and how this impacts the Bank of Canada's Monetary Policy

The 0.25% rate cut will lead to a corresponding drop in the prime rate, which means variable-rate mortgage holders will see their interest rate decrease by the same amount. Those with Home Equity Lines of Credit will also benefit from the cut. Depending on the type of variable rate mortgage you have, you will either see a reduction in your payment OR your payment will remain as-is, but your amortization will be shortened. Your mortgage lender should notify you of the changes, so keep an eye out for their correspondence.

When it comes to fixed mortgage rates, it is still too early to determine whether the recent rate cut will lead to a decrease in these rates. The cut had been largely anticipated, with market predictions of a 90% chance, which means fixed rates may not change significantly in the immediate future.

The Bank of Canada’s next interest rate policy meeting is scheduled for September 4th. While it is too soon to predict the outcome of that meeting, the bank will closely monitor the effects of today's rate cut in the weeks leading up to it. For now, it is positive to see at least some relief for borrowers.

Here's a list of some of the best mortgage rates on the market today:

If you have questions about how today's announcement affects your mortgage, please don't hesitate to reach out.