Experts react to Bank of Canada interest rate cut

Local experts weigh in on BOC rate cut For the fifth consecutive time, the Bank of Canada has cut its key interest rate. Down half a per cent, the rate now sits at 3.25 per cent.

For the fifth consecutive time, the Bank of Canada has cut its key interest rate. Down half a per cent, the rate now sits at 3.25 per cent.

This, after Canada’s economy grew by one per cent in the third quarter of 2024, and the fourth quarter is looking weaker than projected, according to the Bank of Canada.

In London, the CEO of the London – St. Thomas Association of Realtors (STAR), says while it isn’t a big drop, it’s reassuring to see the interest rate head in the right direction.

“It's not a huge difference financially, but it's more, I think, the perception and the understanding that it is going to go to a reasonable, a better level. And we're, we're anticipating a really good impact on the market in the new year,” said Bill Madder. “We're quite happy that it's not a huge jump or that we don't anticipate a huge jump in the market. Slow and steady. That's a much better way for a real estate market to go.”

Meanwhile, local mortgage experts agree this cut will be positive for the region.

“It's going to be a big impact on two fronts. I mean, people that are currently carrying a variable rate mortgage where the payments will fluctuate with the rate. They're going to see a pretty good discount on what they're paying now, which is probably going to alleviate some pressure on them,” said mortgage broker Mike Hattim. “A lot of people, you know, they're fearful of getting into the into the market with home prices being almost three times what they were 10 years ago. I think that now they're going to feel a little bit more comfort in getting into the market. And I think this is a positive.”

The Bank of Canada’s next scheduled date for announcing the overnight rate target is Jan. 29, 2025.

The Bank of Canada’s next scheduled date for announcing the overnight rate target is Jan. 29, 2025.

— With files from CTV’s Mike Le Couteur and CTV London's Brent Lale