Cutting again — 2.5% and prime at 4.7%
After three holds, a cut. Prime drops to 4.7%, and a variable-rate mortgage gets about $14 a month cheaper for every $100,000 borrowed — roughly $115 on the $820,000 that an average-priced GTA purchase carries with 20% down.
A cut after a long pause tends to restart the fixed-versus-variable conversation, so it is worth being straight about it: nobody knows. A variable wins if the Bank keeps cutting and loses if it stops; a fixed buys you a known payment for a term. The honest way to choose is not to forecast, it is to ask what happens to your household if you are wrong — and to look at what the two are actually priced at today, because the gap between them is what you are being paid to take the risk.
August's market was soft: 5,211 sales, an average price of $1,022,143 — down about 8% from a year earlier — and 4.5 months of supply. Prices have given back a meaningful amount over eighteen months while inventory has roughly doubled.
For a buyer, that combination is the most favourable it has been in years. For an owner renewing off a 2020 five-year term, it is beside the point — what matters there is shopping the renewal rather than signing what arrives in the mail.
What the Bank said
“The Bank of Canada today reduced its target for the overnight rate by 25 basis points to 2.5%, with the Bank Rate at 2.75% and the deposit rate at 2.45%. After remaining resilient to sharply higher US tariffs and ongoing uncertainty, global economic growth is showing signs of slowing.”
The rate path around this decision
For context, unemployment was running at about 7.1% and inflation at 2.4% 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.