How the Bank of Canada’s October 2024 Rate Cut Can Benefit Your Mortgage Renewal

If your mortgage renewal is coming up in the next 6 months, the Bank of Canada’s rate cut to 3.75% in October 2024 offers a golden opportunity to secure a lower interest rate and improve your mortgage terms. This rate cut, designed to support economic recovery, could help you save on monthly payments and overall interest costs when renewing your mortgage.

Why This Rate Cut Matters for Your Renewal

• Lock in Lower Rates: With interest rates dropping from 4.25% to 3.75%, now is the ideal time to lock in a more affordable rate for your upcoming renewal. This can result in immediate savings on your monthly payments, freeing up extra cash for other expenses or investments.
• Reduce Your Interest Costs: By renewing at a lower rate, you’ll pay less in interest over the term of your mortgage. For example, if you renew a $400,000 mortgage at 3.75% instead of 4.25%, you could save thousands over the next five years, giving you more financial flexibility.
• Consider Extending Your Mortgage Term: If you’re looking for even lower monthly payments, you might consider extending your mortgage term to 30 years. This could significantly reduce your payment burden while still benefiting from the lower interest rate.

What to Consider Before Renewal

• Renew Early: Many lenders allow you to renew your mortgage early, up to 6 months before your renewal date. This could help you lock in the lower rates sooner and start saving right away.
• Evaluate Your Options: Even if your lender offers a renewal rate, it’s important to shop around and compare offers. The upcoming rate cut means there could be more competitive options available, so don’t settle for the first offer without exploring the market.
• Take Advantage of a Fixed or Variable Rate: With rates expected to stay low for a while, you have the flexibility to choose between a fixed-rate mortgage for stability or a variable-rate mortgage if you want to take advantage of future rate changes.

Why Act Now?

The October 2024 rate cut creates a unique opportunity for those renewing their mortgages. While rates may remain low for some time, market conditions can change quickly. Acting now could help you lock in the best possible rate for your upcoming renewal and save thousands over the life of your mortgage.

Ready to renew? Contact our mortgage specialists today to discuss your options and secure the best rate for your renewal.