{"id":29950,"date":"2025-09-21T23:10:15","date_gmt":"2025-09-21T23:10:15","guid":{"rendered":"https:\/\/www.newsbeep.com\/il\/29950\/"},"modified":"2025-09-21T23:10:15","modified_gmt":"2025-09-21T23:10:15","slug":"renewing-your-mortgage-what-the-bank-of-canadas-rate-cut-means-for-you-national","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/il\/29950\/","title":{"rendered":"Renewing your mortgage? What the Bank of Canada\u2019s rate cut means for you – National"},"content":{"rendered":"

As the Bank of Canada<\/a> on Wednesday lowered its overnight benchmark by 25 basis points from 2.75 per cent to 2.5 per cent, experts say homeowners looking to renew their mortgages<\/a> have a chance to save.<\/p>\n

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Commercial lenders, like private banks, base their rates on the key policy rate set by the central bank. According to the Bank of Canada\u2019s own research, 60 per cent of all Canadian mortgages will be up for renewal in 2025 and 2026.<\/p>\n

Variable-rate mortgages are determined by the central bank\u2019s interest rates, while fixed-rate mortgages are determined by activity in the bond market.<\/p>\n

\u201cRenewing a mortgage got a little easier on Wednesday, but only if you\u2019re sniffing out a variable rate,\u201d said Clay Jarvis, mortgage expert at NerdWallet Canada.<\/p>\n

\u201cVariables have dipped by up to 30 basis points at some lenders, and are well below four per cent at some brokerages and online lenders.\u201d<\/p>\n

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Those looking to wait a little longer to see if the bank cuts rates further should lock down a rate sooner rather than later, said Penelope Graham, mortgage expert at Ratehub.ca.<\/p>\n

\u201cIf you\u2019re someone who is strongly considering getting a variable mortgage rate and you\u2019re wondering if you should wait until perhaps October or December (for the next interest rate cut), it\u2019s actually a great idea to get a rate hold now for up to 120 days,\u201d she said.<\/p>\n

\t\t\t\t\t\t\"Click<\/p>\n

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\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\tInterest rate cut impacts on the housing market\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/p>\n

\u201cEven if we do get a couple more rate cuts, you will still enjoy whatever those lowest rates now are.\u201d<\/p>\n

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Jarvis said the Bank of Canada\u2019s rate cut could make variable rates very tempting, but there are risks for borrowers to consider.<\/p>\n

\u201cBecause of the affordability component, variables can look especially tasty. But it\u2019s really important to remember that once the BoC is done cutting rates, they\u2019ll eventually have to start increasing them,\u201d he said.<\/p>\n

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\u201cIf you\u2019re not comfortable with that level of risk, consider a fixed rate. Fixed rates aren\u2019t as flexible, but they\u2019re predictable and widely available for under four per cent.\u201d<\/p>\n

Whether you\u2019re planning to renew with a fixed- or variable-rate mortgage should depend on what your housing needs are, said Leah Zlatkin, licensed mortgage broker and LowestRates.ca expert.<\/p>\n

If you\u2019re planning to move in a few years, a variable mortgage might make sense since it typically has a lower penalty if you want to break it.<\/p>\n

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\u201cThat\u2019s going to offer you more flexibility should you need to break it. If everything\u2019s going to remain consistent, and you\u2019re good to go for the next three to five years, you can absolutely lock into a fixed,\u201d she said.<\/p>\n

Zlatkin recommends you start shopping for a new mortgage at least four months ahead of your renewal date.<\/p>\n

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\u201cIf you\u2019re sitting in the five per cent range right now, it might be a good time to break that mortgage and look for a lower rate,\u201d she said, adding that the closer to the renewal date you break your mortgage, the lower the penalty is likely to be.<\/p>\n

What ends up costing many Canadians when renewal comes around is loyalty to their bank or lender, Graham said.<\/p>\n

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\u201cIf you are renewing with your existing lender, they send you that renewal letter and it says, \u2018Hey, here\u2019s your new renewal rate, just sign on the dotted line quick and easy,\u2019\u201d she said.<\/p>\n

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\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\tBank of Canada delivers 1st interest rate cut since March\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/p>\n

A recent survey<\/a> said 69 per cent of Canadians end up staying with their current lender when renewing their mortgage. Another survey<\/a> said three in four Canadians stick with the \u2018Big Five\u2019 banks \u2013 RBC, TD, BMO, CIBC and Scotiabank.<\/p>\n

\u201cIt\u2019s usually not the most competitive rate available because lenders tend to reserve those for brand new clients.\u201d<\/p>\n

According to Ratehub.ca analysis<\/a>, Canadians end up paying $155 a month more\u00a0on average if they stick with their current lender. Over a five-year period, that\u2019s a difference of around $9,300.<\/p>\n

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In November last year, Canada\u2019s banking regulator made it easier to switch lenders by removing the stress test requirement<\/a> for a mortgage switch where the principal amount and amortization period haven\u2019t changed.<\/p>\n

\u201cIf you\u2019re coming up for renewal, it\u2019s in your best interest to at least explore your other options with other lenders,\u201d Graham said.<\/p>\n

\n\t\t&copy 2025 Global News, a division of Corus Entertainment Inc.\t<\/p>\n","protected":false},"excerpt":{"rendered":"As the Bank of Canada on Wednesday lowered its overnight benchmark by 25 basis points from 2.75 per…\n","protected":false},"author":2,"featured_media":29951,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[2845,114,245,2096,184,85,46,13666],"class_list":["post-29950","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-bank-of-canada","tag-business","tag-canada","tag-consumer","tag-economy","tag-il","tag-israel","tag-mortgages"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/29950","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=29950"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/29950\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/29951"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=29950"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=29950"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=29950"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}