As of March 2025, the Bank of Canada’s policy rate is 2.75% and might decrease—but nothing is guaranteed.

Here’s what that means for you

Variable-Rate Mortgage Holders

Your rate = Prime ± lender adjustment.
E.g., If Prime is 6% and your rate is Prime - 0.50%, your rate = 5.50%.

If you have:

— Fixed Payment Variable Mortgage → More goes to principal when rates drop.
— Adjustable Payment Variable Mortgage → Your monthly payment decreases when rates fall.

Fixed-Rate Mortgage Holders
Your payments don’t change, even if rates drop. That’s the trade-off: stability vs. flexibility.

Risks to keep in mind

• Fixed rates may be higher—plus, penalties apply if you want to switch.
• Variable rates can go up, increasing your cost—or trigger a lump sum payment.

So, which is better?

It depends on your risk tolerance, goals, and budget.