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| Today's Prime Lending Rate | 5.45% | Next Bank of Canada Meeting - January 29th 2025 |
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Variable Rates: * |
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| Home Equity Line of Credit | P + .25% (5.70% today) | No Change |
| 5 Year Closed - 25 year amortization Purchases Only | P - 0.90% (4.55% today) | No Change |
| 5 Year Closed - 30 year amortization Refinances | P - .50% (4.95% today) | No Change |
Residential Owner Occupied Fixed Mortgage Rates From: ** |
| 1 Year Closed | 6.09% | .54% Decrease |
| 2 Year Closed | 5.44% | .48% Decrease |
| 3 Year Closed | 4.44% | .45% Decrease |
| 4 Year Closed | 4.54% | .35% Decrease |
| 5 Year Closed - Refinances | 4.59% | .20% Decrease |
| 5 Year Closed - CMHC/Sagan insured purchases and transfers | 4.29% | .10% Increase |
| 7 Year Closed - CMHC insured for purchases and transfers | 5.35% | .55% Decrease |
| 10 Year Closed - CMHC insured for purchases and transfers | 5.75% | .05% Decrease |
| Federal Government / Bank of Canada Qualifying Rate or contract rate plus 2% (the higher) |
Bank of Canada December 11, 2024 Meeting Update
The Bank of Canada has reduced its benchmark interest rate, marking the first decrease after 11 consecutive rate hikes since September 2022. Inflation, which had been as high as 5.9% at the start of 2024, has softened to 2.00% by August, aligning with the Bank’s target rate of 2%. However, a key factor behind this recent 0.5% rate cut is the concerning rise in the unemployment rate, which recently hit 6.80%—the highest level since 2017.
The federal government’s lack of attention to fiscal discipline, coupled with excessive economic stimulus and carbon tax increases, has created a challenging environment for borrowers, especially first-time home buyers. As mortgage refinance rates settle at 4.79%, the federal stress test requires borrowers to qualify at a 6.79% rate. This means that rising interest rates are reducing Canadians’ ability to both purchase homes and refinance existing properties, while also dampening overall investment in the country.
In practice, all home buyers, regardless of their down payment size, and homeowners seeking to refinance, regardless of equity, must qualify for mortgages based on the federal government's stress test, which is set at 2% above the offered contract rate.
The Bank of Canada Qualifying Rate applies to high-ratio insured mortgages, variable-rate mortgages, and fixed-rate mortgages with all federally regulated lenders.
