In a surprising move, the Bank of Canada announced a 0.5% rate cut today. Typically, these rate adjustments come in 0.25% increments, so when we see a cut this big, it’s usually a signal that something big is happening in the economy. But what does this mean for you as a homebuyer?

Why the Bank of Canada Cut Rates by 0.5%

The Bank of Canada only makes large cuts like this when the economy shows signs of significant slowing, or when a recession is looming. Rate cuts are a tool used to stimulate the economy, but they take time to have an impact – sometimes months or even years. This half-percent cut shows that the economy is slowing after the rapid rate hikes we’ve seen in the past few years to combat inflation. Now, we’re beginning to feel the effects, and the Bank of Canada is taking action to try to ease the slowdown.

Should You Choose a Fixed or Variable Rate Mortgage?

If you’re currently shopping for a home, this rate cut might have you wondering whether to go with a fixed or variable mortgage rate. With the economy slowing, it could make sense to opt for a variable rate, hoping that fixed rates will drop over time. The good news is that if you start with a variable rate, you always have the option to lock into a fixed rate later without penalty. Read my blog for more information.

What Should Your Strategy Be?

Every situation is different, and it’s essential to have a strategy tailored to your financial goals. If you’re not sure which mortgage option is best for you, I’m here to help. Please reach out with any questions regarding your mortgage. If you’re looking to get pre-approved for a mortgage to buy a property in Edmonton, fill out my online application. I’m here to help you every step of the way.

About Jason Scott, Edmonton Mortgage Broker

Looking for a personalized mortgage solution? As an Edmonton Mortgage Associate, I’ll be your trusted partner who will help you get the right mortgage for your family home or Investment property. I’m Jason Scott, and I’ll be your Mortgage Broker in Edmonton.