Another half point — and a rule change days away
The second consecutive half-point cut, and prime is 1.75 points below its peak. On an $880,000 mortgage the cuts since June are worth somewhere near $900 a month compared with where payments sat in the spring. For a market where the average sale price is over a million dollars, that is the difference between a file that works and one that does not.
But the more consequential thing for Toronto buyers this month is not the rate. On December 15 the price ceiling for insured financing rises to just under $1.5 million, from $1 million. In most Canadian cities that is an abstraction. Here it is the single rule that has most shaped who can buy what.
What it means concretely: below $1.5M you can put down 5% of the first $500,000 plus 10% of the portion between $500,000 and $1.5M. On a $1.2 million semi that is $95,000 rather than the $240,000 the old rule demanded. At $1.5M and above there is no insurance available at all — 20% down is the minimum, and the set of lenders willing to write the deal narrows considerably. That cliff, sitting right where a lot of Toronto freehold inventory is priced, is worth understanding before you start looking.
November's market gave 5,875 sales at an average of $1,106,050 and about 3.3 months of supply. Between the cuts and the rule change, the spring is going to look different from the autumn. If you are planning to buy in it, the useful work to do over the holidays is documentation, not rate-watching.
What the Bank said
“The Bank of Canada today reduced its target for the overnight rate to 3.25%, with the Bank Rate at 3.5% and the deposit rate at 3.25%. The global economy is evolving largely as expected in the Bank’s October Monetary Policy Report (MPR).”
The rate path around this decision
For context, unemployment was running at about 6.7% and inflation at 1.8% 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.