2025 Interest Rate Announcement Schedule Bank of Canada
2025 interest rate announcements and the Monetary Policy Report
The scheduled dates for the interest rate announcements for 2025 are as follows:
- Wednesday, January 29
- Wednesday, March 12
- Wednesday, April 16
- Wednesday, June 4
- Wednesday, July 30
- Wednesday, September 17
- Wednesday, October 29
- Wednesday, December 10
All interest rate announcements will take place at 09:45 (ET), and the Monetary Policy Report will be published concurrently with the January, April, July and October rate announcements.
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The Future of Variable-Rate Mortgages in Canada: A Financial Perspective
As we analyze the current forecasts from both TD and CIBC, there’s a possibility that the Bank of Canada may reduce the overnight target rate to 2.75% by the end of 2025. If this scenario unfolds, it would likely result in a prime rate of 4.95% for most lenders.
Impact on Variable-Rate Borrowers
This potential rate decrease would lead to significant savings for those with variable-rate loans. Here’s how:
- A drop from the current prime rate of 6.70% (as of writing this, sept 3rd 2024) to 4.95% translates to:
- 1.75 percentage points (or 175 basis points) decrease in variable rates.
- This reduction would also apply to other types of loans, such as personal loans and home equity lines of credit.
Annual Savings Breakdown
- For every $100,000 in mortgage debt:
- Borrowers would save approximately $1,250 annually.
- For a $400,000 mortgage:
- The annual savings would amount to around $5,000.
These savings can accumulate quickly, offering much-needed financial relief to many borrowers facing challenges.
Who Benefits?
Around 30% of Canadian mortgage holders currently have variable-rate mortgages. This group includes:
- Fixed-payment variable mortgages: Where the payment remains constant, but the interest portion fluctuates.
- Adjustable-rate mortgages: Where payments change in accordance with the prime rate.
Recent Trends in Variable-Rate Mortgages
Despite a significant drop in the popularity of variable-rate mortgages during the past interest rate hikes, there is a renewed interest as the easing cycle begins. Recent statistics indicate that:
- In the first quarter, 12.9% of new mortgage borrowers chose a variable-rate mortgage.
- This is a notable increase from a low of 4.2% in the third quarter of 2023.
However, this figure is still considerably lower than the peak during the pandemic, when nearly 57% of new borrowers opted for variable rates.
Looking Ahead
As the Bank of Canada continues to lower rates, we can anticipate that more borrowers will reconsider variable-rate mortgages. The allure of reduced monthly payments and lower overall interest costs is likely to reignite interest in this mortgage option.
In conclusion, should the forecasts hold true, the financial landscape for variable-rate borrowers in Canada could become significantly more favorable.
