Better Mortgage Select Presents: Breaking Interest Rate News - Brought to you by Daniel Patton, Michael Zanzini, Lorenzo Podda, and our President, Dave Butler.

This morning, the Bank of Canada announced it has lowered its key rate by 0.25%.

The move confirms what markets have been telegraphing for weeks: Policy makers are prioritizing the fight against weak economic growth — soft GDP, rising unemployment, and mounting pressure from trade/tariff headwinds — despite sticky core inflation.

This brings the prime rate that is tied to mortgages down to 4.45%.

• Fixed rates: This Bank of Canada rate cut itself doesn’t set the fixed mortgage rates, however, the Canadian bond yields (where fixed mortgage pricing comes from) have already been trending lower. As the big banks and market digest today’s move over the coming weeks, we expect to see most 5-year fixed offers near 3.99% (or better). The 3-year fixed rate product has been popular as of late and we expect to see it eventually re-priced in the 3.59%-3.89% range (or better).

• If you chose a variable rate mortgage by design (between late 2022 to today): Good call — the cycle is doing its work. The core strategy now is to watch for a bottoming in the Canadian bond yields and be ready to LOCK-IN or CONVERT to a fixed mortgage rate if/when you see your sweet spot. History has shown time and time again, that the bond yields act as a “canary in the coalmine” when it comes to the direction of overall mortgage rates.

• If you’re out shopping for a home, get pre-approved: Lock a 120-day rate hold today. If rates fall again before you find your new home, your rate gets floated down; if rates pop, you’re protected.

• Mortgage renewals over the next 6–12 months: If you have a low fixed rate from 2021/2022, there is no sense in renewing early.  However, let’s start lightly planning now so you can time a switch/refinance if the fixed mortgage rates dip into your target band.  If you have one of those higher 3-year fixed rates that is renewing over the next year, it may make sense to look at renewing/refinancing early and getting rid of that old, higher interest rate you likely have.

Want a game plan tailored to you?

Reply to this email with the subject "Rate Plan" and we’ll map out the best move – variable watch-and-lock timing, 3-year vs. 5-year fixed comparisons, refinance/renewal scenarios – based on your file and timeline.