Mortgage Basics #Featured articles
Mortgage Basics #Featured articles
Bank of Canada Policy Interest Rate Schedule
Table of contents
CURRENT POLICY INTEREST RATE:
Whether you’re a homeowner, homebuyer, or are just looking to own some real estate, you’ve probably heard of the Bank of Canada’s interest rate announcements and the anticipation surrounding them.
This post will examine the Bank of Canada’s interest rate announcements, why they occur, and the rate announcement dates in 2025.
Key Takeaways
- As the country’s central bank, the Bank of Canada is responsible for setting the target to the overnight rate, also known as the policy interest rate.
- The target overnight rate represents the starting point for all interest rates in the country.
- Bank of Canada policy rate announcements follow a predetermined schedule 8 times each year.
What to Expect from a Bank of Canada Announcement
The Bank of Canada is responsible for the nation’s monetary policy. Part of this job is setting the target for the overnight rate, also known as the policy interest rate. When headlines talk about the “Bank of Canada announcement,” they typically refer to any changes made to this rate by the BoC.
The target overnight rate represents the benchmark for all interest rates in the country, including the prime rates set by banks and lenders, known as the prime rate. When the BoC rate changes, all variable and adjustable mortgage rates change accordingly. Following a period of historically low rates, the Bank of Canada began to increase its rate in 2022, and rates have remained high ever since.
Bank of Canada Interest Rate Announcement Schedule
Bank of Canada rate announcements follow a set schedule for the entire year. Here is the Bank of Canada interest rate announcement schedule.
Announcement Dates 2025
- Wednesday, January 29
- Wednesday, March 12
- Wednesday, April 16
- Wednesday, June 4
- Wednesday, July 30
- Wednesday, September 17
- Wednesday, October 29
- Wednesday, December 10
Announcement Dates 2024
- Wednesday, January 24 (press release)
- Wednesday, March 6 (press release)
- Wednesday, April 10 (press release)
- Wednesday, June 5 (press release)
- Wednesday, July 24 (press release)
- Wednesday, September 4 (press release)
- Wednesday, October 23 (press release)
- Wednesday, December 11 (press release)
Where Rates Stand in December 2024
In December, the Bank of Canada decreased rates for the fifth time with another 50 basis point cut. This was expected mainly due to weaker GDP growth and unemployment reaching an 8-year high (excluding the pandemic). The economic outlook shows a soft labour market, weak GDP growth, excess supply, and the possibility of tariffs imposed on Canadian exports to the US, creating economic uncertainty. Consumer spending and housing activity have increased, likely due to lower interest rates boosting household spending.
The Governing Council lowered the policy rate by 50 basis points to support economic growth and keep inflation close to the 2% target.
Bank Of Canada Interest Rate Predictions for January 2025
Looking forward to the policy announcement on January 29th, 2025, we predict that the Bank of Canada will likely issue another rate cut. Most predictions indicate we could see a 25 basis point cut at this announcement if inflation remains close to the middle of the Bank of Canada’s 1% to 3% target range. While a rate hold is always possible, these chances are always subject to change due to fluctuating macroeconomic factors, such as inflation, labour market, GDP growth, and strength or weakness in the US economy.
Should We Expect Rate Increases in 2025?
While the Bank of Canada’s effort to control inflation continues, rate increases in 2025 are unlikely. Most economists are pricing further rate cuts for the January announcement, which is subject to change based on inflation, employment, and GDP data released over the coming months.
Today’s Best Mortgage Rates as of January 23, 2025
Where to Find Bank of Canada’s Historical Interest Rate Changes
The Bank of Canada lists the last 12 historical interest rate changes and offers the option to look up how rates have changed over the past 10 years. These changes directly affect the country’s housing market and affordability, but learning to manage your expectations concerning the BoC rate changes is key, especially if you are planning to enter the real estate market.
| Date | Target (%) | Change (%) |
|---|---|---|
| December 11, 2024 | 3.25 | -0.50 |
| October 23, 2024 | 3.75 | -0.50 |
| September 4, 2024 | 4.25 | -0.25 |
| July 24, 2024 | 4.50 | -0.25 |
| June 5, 2024 | 4.75 | -0.25 |
| April 10, 2024 | 5.00 | No Change |
| March 6, 2024 | 5.00 | No Change |
| January 24, 2024 | 5.00 | No Change |
| December 6, 2023 | 5.00 | No Change |
| October 25, 2023 | 5.00 | No Change |
| September 6, 2023 | 5.00 | No Change |
| July 12, 2023 | 5.00 | +0.25 |
| June 7, 2023 | 4.75 | +0.25 |
| April 12, 2023 | 4.50 | No Change |
| March 8, 2023 | 4.50 | No Change |
| January 25, 2023 | 4.50 | +0.25 |
| December 7, 2022 | 4.25 | +0.50 |
| October 26, 2022 | 3.75 | +0.50 |
| September 7, 2022 | 3.25 | +0.75 |
| July 13, 2022 | 2.50 | +1.00 |
Where to Find Bank of Canada’s Monetary Policy Reports
When the Bank of Canada announces policy rates, it also releases a quarterly monetary policy report. These reports assess the global and Canadian economies and summarize the reasoning behind the Bank of Canada’s decisions.
The data presented covers a wide range of perspectives, including the status of the Canadian dollar, the state of inflation, overall consumption, housing, exports, imports, and projections of how we expect the economy to perform in the future.
Final Thoughts
The Bank of Canada’s policy rate decisions directly affect the country’s housing market, affecting housing affordability. By managing your expectations in light of upcoming BoC rate changes, you’ll be in a much better position, especially if you’re looking to enter the real estate market soon.
For more personalized advice that better matches your financial circumstances, contact one of nesto’s mortgage experts today, who can help you understand what changes in interest rates mean for your mortgage qualifying amount.
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