Tag: mortgage

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Bank of Canada Rate Cuts: What They Mean for Mortgages and Savings

Rate update dated October 29, 2025.

The Bank of Canada reduced its target for the overnight rate by 0.25 percentage points on October 29, 2025, bringing the target to 2.25%. The rate had also been reduced to 2.50% on September 17, 2025. This article explains why policy-rate changes matter to mortgage and savings-calculator users.

Why the policy rate matters

  • Variable-rate mortgages and home-equity products can respond more directly to changes in short-term rates.
  • Fixed mortgage rates are influenced by bond yields and lender pricing, so they do not always move by the same amount or at the same time.
  • Savings-account and GIC rates can change when market conditions and lender funding costs change.

How to use this information

When comparing mortgage scenarios, use the rate you are actually offered rather than assuming the Bank of Canada policy rate is your mortgage rate. For savings or GIC planning, use the advertised account rate and check whether it is promotional, variable, or fixed.

Compare payments with the Canadian mortgage calculator, review current lender information on our mortgage rates page, and estimate savings growth with the Canadian savings calculator.

The Bank of Canada’s official policy interest-rate table contains the current rate and historical changes. Rates and lender offers can change without notice.

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Canadian Mortgage Reforms: $1.5 Million Insured-Mortgage Cap and 30-Year Amortizations

Originally announced September 24, 2024; effective December 15, 2024.

Canada introduced important insured-mortgage changes that affect some home buyers and mortgage calculations. The federal mortgage reforms increased the insured-mortgage price cap from $1 million to $1.5 million and expanded access to 30-year amortizations for all first-time home buyers and all purchasers of new builds.

What changed

  • The insured-mortgage price cap increased to $1.5 million for eligible high loan-to-value mortgages.
  • 30-year amortizations became available to all first-time home buyers and buyers of newly constructed homes, subject to the applicable eligibility rules.
  • The measures apply to mortgage-insurance applications submitted to mortgage insurers on or after December 15, 2024.

How the changes affect calculations

A longer amortization can lower the required monthly payment, but it generally increases the total interest paid over the life of the mortgage. A higher purchase-price cap may allow some buyers to qualify for insured financing, but the down payment, debt-service ratios, mortgage rate, and lender approval still matter.

Use the Canadian mortgage calculator to compare payment amounts and total interest. If you are estimating the maximum home price you may qualify for, use the mortgage affordability calculator.

Important limitations

These changes do not guarantee mortgage approval. Eligibility, down-payment requirements, property type, debt-service calculations, mortgage insurance, lender policies, and the rate offered to a borrower can affect the final result.

For the official announcement and full conditions, see Finance Canada’s mortgage-reform backgrounder.