go through Ian Bickis
Penelope Graham, mortgage expert at RateHub.ca, said that if the lender does cut 0.25 percentage points, it means that the minimum variability rate for the five-year term should be increased from 3.95% to 3.70%, while the minimum fixed rate should be 3.94%.
“So we have 24 basis points there, which isn’t big, but you know it’s important,” she said.
“For someone attracted by variable speeds, we may see a narrative that more tax rates may be cut this fall.”
RateHub estimates that those with variable mortgages are expected to see the decisions of the latest Canadian banks change rapidly. If the variable interest rate for a $624,277 mortgage ranges from 3.95% to 3.70%, then the average home price can save $84 per month.
However, she warns that the decision between fixed and variables does depend on risk tolerance.
“We have a lot of precedents that variable rates can recover with a slower rate (if not faster) trend, and we still have a lot of headwinds that could cause boiling inflation.”
Gov. Tiff Macklem said risks have changed since July, including worsening labor markets and sharp declines in exports.
“Due to the weaker economy and less risk of rising inflation, the Council believes it is appropriate to lower policy rates,” he said in his prepared speech.
The deteriorating prospects, including a weaker jobs report on September 5, also pressured down bond yields that set fixed interest rates.
Graham said bond yields could be further affected by the Fed.
The U.S. central bank lowered its key interest rates by a quarter on Wednesday and said it could increase twice by the end of the year.
Graham spoke in his speech ahead of the U.S. announcement that more signals of impending cuts are a key part of the market’s response.
“If their comments are very bad, then we can see a further drop in yields and then we will start to see some additional fixed tax reductions.”
Meanwhile, Macklem has little forward guidance on further interest rate decisions, making CIBC expect to lay off employees again in October, said Andrew Grantham, a senior CIBC economist, in a note.
“While guidance on further lowering interest rates is needed and when guidance is needed, in our view, the economy is losing resilience and inflation will continue to be controlled by rising unemployment and eliminating retaliatory tariffs.”
Visited once today, visited once today
Banks in Canada Banks Interest Rate Decisions Bonds Earnings Fixed Mortgage Rates Mortgage Rates Trend Mortgage Rates Penelope Graham Canada News Tiff Macklem
Last modified: September 17, 2025
