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Some financial relief is on the way for Canadians after the Bank of Canada announced a cut to its key interest rate.
The central bank made the announcement on Wednesday, reducing the rate from five per cent down to 4.75 per cent. Canada is the first G7 country to make a key interest rate cut since the COVID-19 pandemic.
Carrie Cardinal, a Regina mortgage broker, said the reduced rate will have some big effects.
“After 10 increases on the prime rate we have finally seen a little bit of a drop,” said Cardinal. “That’s going to be great for the market (and) also wonderful for homeowners that are in variable-rate mortgages, because their payments will also come down.”
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Cardinal said those with variable-rate mortgages will see a dip in their payments, effective immediately.
It’s been more than four years since the Bank of Canada last reduced its rate, and Cardinal said Wednesday’s announcement is a very positive sign.
“The Bank of Canada has decided that it is now safe at this point to drop the rate by a quarter percent,” said Cardinal. “We are welcoming this change, because the interest rate has not moved since 2020.”
Cardinal said more decreases could be coming from the central bank in the future.
“I believe that this is going to be the start of what we hope will be a slow and steady decrease,” said Cardinal, calling the move a step in the right direction.
