Bank of Canada Cuts Overnight Rate

This morning, the Bank of Canada (BoC) cut the overnight lending rate by 25 basis points to 0.50%. According to the BoC, the rate cut was necessary to stimulate the economy, which has suffered from weak oil prices and may technically be in a recession.

TD has since lowered their prime lending rate by .10% to 2.75%. My expectation is that other major banks will follow their lead.

Assuming the prime rate drops across the board, variable rate mortgage holders will see a slight drop in their payments. No changes for fixed rate mortgage holders.

We will keep an eye on rates over the next couple weeks to see if this announcement triggers any changes with fixed rates or the discounts being offered on variable rates.