Bank of Canada cuts benchmark mortgage rate to lowest level in three years

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The Bank of Canada has cut its benchmark five-year mortgage rate to 4.79 per cent, its lowest level in about three years. Bank of Canada Governor Tiff Macklem responds to a question during a news conference, Wednesday, July 15, 2020 in Ottawa. THE CANADIAN PRESS/Adrian Wyld
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OTTAWA — The Bank of Canada has cut its benchmark five-year mortgage rate to 4.79 per cent, the second cut in three months.

The central bank in May had trimmed the rate to 4.94 per cent from 5.04 per cent.

Three-year rates now dropped to 3.75 per cent and one-year rates remained unchanged at 3.09 per cent.

The Big Six banks had already cut their advertised five-year fixed mortgage rates to the same level, though some special offers reduce rates to as little as 2.19 per cent.

Lower rates risk propelling housing demand higher.

The Bank of Canada’s governor, Tiff Macklem, indicated about a month ago that rates will be kept low until at least 2023.

Various rates for guaranteed investment certificates also fell with the five-year personal fixed term dipping 0.18 percentage points to 0.7 per cent, but the prime rate remains unchanged at 2.45 per cent.

This report by The Canadian Press was first published June 16, 2020.

The Canadian Press