What changed:
The Bank of Canada recently reduced its policy/overnight rate by 25 basis points (0.25%).As a result, many lenders have also adjusted their prime (base) rates downward accordingly.
What this means for you:
If you have a variable-rate mortgage (or are considering one), here’s a rough estimate of how your monthly payment could change:
For every $100,000 of mortgage balance, a 0.25% drop in interest might reduce monthly payments by approximately $14-$30/month, depending on amortization and the exact variable rate contract.
Example: If you have $300,000 remaining, you might see a reduction of roughly $42-$90/month, all else being equal.
Note: If your variable-rate mortgage has a fixed payment amount (i.e., payment doesn’t change until renewal), what will happen instead is that a larger portion of your payment goes toward principal rather than interest — meaning you’ll pay off faster.
Next steps you might consider:
If you’re already on a variable rate: check with your lender/broker to confirm how your specific contract handles rate-drops (payment reduces vs amortization change).
If you’re buying, renewing or refinancing soon: this drop may increase your buying power or reduce your carrying cost — let’s connect if you’d like me to run some numbers for you based on your situation.
If you’ve been waiting for a favourable rate to act: this helps make the variable-option look stronger than before (though fixed vs variable still depends on your risk tolerance and market outlook).