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Better Mortgage Select presents: Breaking interest rate news, brought to you by Daniel Patton, Michael Zanzini, Lorenzo Podda, and our President, Dave Butler.
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The Bank of Canada held its final interest rate meeting of the year this morning and concluded 2024 with a bang, announcing a JUMBO 0.50% cut to the key interest rate.
Here’s the scoreboard for 2024: - 5 consecutive rate cuts since June
- 2 back-to-back JUMBO cuts of 0.50% each to close out the year
- A total of 1.75% in rate reductions this year
The Bank of Canada cited rising unemployment (6.8%), underwhelming GDP growth (1.0% in Q3), and stable inflation (holding at the 2.0% target) as the key reasons for this decisive move. This cut means 2025 will begin with a Bank of Canada Prime rate of 5.45%, placing most variable-rate mortgages in the range of 4.45%–4.90%, depending on your discount to Prime.
| | | | | | | | While additional rate cuts are anticipated in 2025, we expect the pace to slow during the first half of the year. According to major bank economists:
- Conservative predictions suggest one more 0.25% cut
- Optimistic forecasts anticipate up to 1.00% in total cuts
If you’ve been waiting for fixed rates to drop, the moment is almost here. One major bank is already offering fixed rates at 3.99% and lower for CMHC-insured mortgages (less than 20% down payment). By spring, we anticipate the “sweet spot” for 5-year fixed rates in the 3.49%–3.99% range.
Economist, Benjamin Tal, of CIBC has noted: “With inflation under control and the economy cooling, now is the time for homeowners to take advantage of historically low fixed rates, securing stability in an unpredictable market.”
For clients planning to hold their mortgages over the next five years, locking in a fixed rate at 3.99% or lower is highly recommended. This move offers protection from potential rate volatility in 2026 and beyond, especially with global uncertainties like trade tariffs or shifts in economic policies from our southern neighbors.
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We’re here to help you navigate these opportunities. If you’d like to discuss locking into a low fixed rate, renewing, or refinancing, email us at info@bmselect.ca, and we’ll help craft the best strategy for your needs. | | | | | | | | | | Join us for our last webinar of the year, TONIGHT! Mortgage Year in Review and Preparing for 2025 Tonight at 6:30PM EST We’ll discuss today’s JUMBO rate cut, what it means for 2025, and more. Click the image below to join the webinar tonight at 6:30PM EST, or use the following link: https://us02web.zoom.us/j/7436519435 | | | | | | | | | | | | | | | | Our December newsletter will include: - Predictions from Dan, Mike, Lorenzo, and Dave for 2025 interest rates
- Insights from the November inflation report, released Tuesday
- The Bank of Canada’s 2025 interest rate schedule
- And much more!
| | | | | | Just a friendly reminder to come visit us on our socials, where we put out a ton of videos with tips and information to help you navigate the wild world of mortgages! Check out the links below and give us a follow! | | | | | | | | | | | | | | | | As always, if you have any questions or want to do some mortgage planning, feel free to reach out to us at: | | | | | | | |
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