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Why Interest Rates Matter for Canadians

Interest rates are the single most powerful lever in Canada's economy.  When the Bank of Canada adjusts its policy rate, the effects reach every household—from the cost of carrying a mortgage to the return on a savings account. With rates currently at 2.25% and significant uncertainty ahead, understanding how rates work has never been more important for your finances. What Is the Bank of Canada's Policy Rate? The Bank of Canada sets the overnight policy rate—the interest rate at which major banks lend money to each other. This rate serves as a benchmark that influences borrowing and lending costs across the entire economy. When the Bank raises or lowers this rate, commercial banks adjust their prime rates accordingly, which directly affects the rates you pay on mortgages, lines of credit, and other loans. The Bank's primary goal is to keep inflation near its 2% target. When inflation runs too hot, the Bank raises rates to cool spending. When the economy slows, it cuts rates...
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Canadian Home Sales See Steady Growth in September

 

In September 2024, Canadian home sales experienced a notable increase, rising by 1.9% compared to the previous month. This marks a significant annual growth of 6.9%, according to data released by the Canadian Real Estate Association (CREA) on Tuesday.

The uptick in sales comes in the wake of the Bank of Canada’s third interest rate cut this year, which has contributed to a more favorable borrowing environment for homebuyers. Despite the increase in sales, the number of properties listed for sale remains below historical averages, with 185,427 properties available on Canadian MLS® Systems at the end of September.

This steady growth in the housing market reflects a resilient demand for homes across the country, even as economic conditions fluctuate. The continued interest rate cuts are expected to further stimulate the market, potentially leading to more robust sales figures in the coming months.


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