When the Bank of Canada (BoC) reduces its overnight rate, it typically impacts the interest rates for loans, mortgages, and other financial products, but that doesn’t always result in an immediate change to your mortgage rate.
Here are a few reasons why your mortgage rate may not have changed:
Type of Mortgage:
If you have a fixed-rate mortgage, your interest rate is locked in for the term of the mortgage (usually 1 to 5 years). In this case, changes in the Bank of Canada’s overnight rate won’t affect your mortgage rate until you renew or refinance. This is because fixed rates are based on bond yields and not set by the Central Bank.
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