Bank of Canada cuts interest rates by 25 basis points

The Bank of Canada announced its interest rate decision on Wednesday, cutting its benchmark rate by 25 basis points, bringing it to 2.50 per cent.

The central bank had kept it steady at 2.75 per cent since March 2025 after cutting rates seven times as US President Donald Trump's tariffs took effect, prompting the Bank of Canada to put the interest rate cut cycle on hold to assess their impact on the economy and consumer prices.

The central bank's latest interest rate cut is a relief move for Canadian homebuyers, especially variable-rate mortgage holders who will benefit immediately, reducing their monthly payments.

Variable mortgage rates are directly linked to the Bank of Canada's policy rate. The central bank's overnight rate cut also brought the deposit rate to 2.45 percent.