A cut into a trade war, and the renewal wall
Prime falls to 4.95%, back below 5% for the first time since 2022. The Bank is now cutting into genuine uncertainty rather than into a straightforward disinflation — tariffs cut both ways for monetary policy, pushing prices up while pushing growth down, and that is a harder problem than the one it spent 2023 and 2024 solving.
For Toronto homeowners the more immediate arithmetic is renewal. Anyone who took a five-year fixed in 2020 or a five-year fixed in early 2021 signed at somewhere near 2%. Those terms are maturing now, into a market where a five-year fixed is meaningfully higher. On an $700,000 balance, that transition is a substantial monthly increase — the kind of number that changes what a household does with the rest of its budget.
Two things worth knowing if that is you. You are not obliged to take what your current lender offers at renewal, and switching lenders at maturity does not require you to re-qualify under the stress test if the mortgage is simply moving as-is — extending the amortization or taking new money is a different conversation. And the offer that arrives in the mail is rarely the best one available; it is worth shopping it, and that is exactly the sort of file a broker is useful on.
February's market: 4,037 sales, an average of $1,084,547, and inventory pushing 3.8 months. Listings are building faster than sales, which for a buyer is the most useful thing happening right now.
What the Bank said
“The Bank of Canada today reduced its target for the overnight rate to 2.75%, with the Bank Rate at 3% and the deposit rate at 2.70%. The Canadian economy entered 2025 in a solid position, with inflation close to the 2% target and robust GDP growth.”
The rate path around this decision
For context, unemployment was running at about 6.8% and inflation at 2.3% 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.