Bank of Canada cuts key interest rate to 0.25%

The overnight rate now stands at 0.25%, so there is not much to cut any more, and probably no more cuts.

I hope the banks will cut the prime rate accordingly. Even though it is not a big cut, it is a saving of $250 for every $100,000 debt.

In less than one year, the prime rate will drop from 6% to 2.25%. This has a huge impact on people who holds flexible mortgages and line of credit.

For example, for line of credit at prime rate, when it was 6%, the interest is $500 per month for $100,000. Now, the interest per month will be $188! This turns many negative cash flow properties into positive ones.