A half-point cut, and the condo–freehold gap widens
Fifty basis points at once. If you are in a variable-rate mortgage with a floating payment, this is the first decision in this cycle you will genuinely feel — roughly $29 a month for every $100,000 borrowed, so about $255 a month on the $880,000 or so that a average-priced GTA purchase carries with 20% down.
Prime is now 5.95%, down 1.25 points since June. Anyone who took a variable in 2022 and held on through the hiking cycle has spent two years watching that number go the wrong way. It is worth actually re-running your own numbers rather than assuming: the gap between what you are paying and what is available on a fixed term has changed shape several times this year.
The more useful Toronto story is underneath the headline. Detached houses and condo apartments are not one market and have not been for two years — they have different buyers, different inventory, and increasingly different price direction. A rate cut helps a first-time condo buyer's qualifying more, in proportional terms, than it helps someone stretching for a freehold in the 416, because the freehold buyer is usually constrained by the stress test rather than by the payment.
October's TRREB numbers had 6,658 sales and an average price of $1,135,215, with inventory still around 3.3 months. Sales picked up on the cuts; prices did not move much. That is what a market clearing built-up demand looks like, and it is a better moment to buy than one where both are rising.
What the Bank said
“The Bank of Canada today reduced its target for the overnight rate to 3.75%, with the Bank Rate at 4% and the deposit rate at 3.75%. The Bank continues to expect the global economy to expand at a rate of about 3% over the next two years.”
The rate path around this decision
For context, unemployment was running at about 6.6% and inflation at 2% around this decision.
Where this leaves you
Rate announcements make headlines; approvals turn on your own numbers. If you're buying, renewing or refinancing in Toronto, the useful next step is finding out what you actually qualify for — see current rates, run the math, or start an application. You can also follow the local market in our Toronto housing market reports.