This morning, the Bank of Canada made their sixth announcement of 2025 and, for the first time since March, has decided to reduce their policy rate by 0.25%. This means the Prime Rate should now be at 4.70%.

As indicated in our previous announcements, the Prime Rate directly impacts those who hold variable or adjustable rate mortgages, as well as those with secured or unsecured lines of credit. These rate announcements do not have a direct correlation to fixed rate mortgages, as fixed rates are priced against the bond market. If you're unsure whether you're impacted by this announcement, please reach out or book a time to chat HERE.

While the probability of a rate cut was looking low for a majority of August, the unemployment figures announced on September 5th - stating the rising unemployment rate to 7.1% and the loss of 66,000 jobs in August - ignited the discussion of a potential cut in September. As outlined by the Bank of Canada these 'job losses have largely been concentrated in trade sensitive sectors'. 

The other barometer for determining appropriate policy rate updates is the CPI inflation reading. As reported recently, the CPI Inflation was up to 1.9% in August. While still higher than the previous month's reading, it did come in lower than the anticipated increase which was welcome news. The Bank of Canada articulated that 'a broader range of indicators...continue to suggest underlying inflation is around 2.5%'. 

While there is still a level of uncertainty with the disruptive effects of shifts in trade, the Bank of Canada has stated that a reduction in the policy rate was an appropriate decision to better balance the risks - given the economy is in a weaker position with less upside risk to inflation.

We are sure this announcement has been welcomed by many! In a world where most aspects of life are feeling more and more expensive, any bit of reprieve is welcome. That being said, if life is still feeling more difficult that it should be, please reach out. We have many tools available to us that may be able to help make life easier. 

We understand there may still be many questions and concerns amongst our clients and partners. As part of our commitment to providing the most up to date information and comprehensive support, we provide our very own Canadian Mortgage App. Interested in potentially refinancing to make your monthly payments more comfortable? Click HERE to download the app and run various scenarios to see what the best fit may be. 

Information Note

As always, we are here to help. If you'd like to chat about your scenario, make sense of what's going on, or see what options may be available for you, let us know!

We will keep you updated as we receive more information about today's announcement, that information can be found HERE. If you're interested in reading the Bank of Canada's announcement, please click HERE. The next announcement is scheduled to take place on October 29th, 2025.

OAC, E&O