Bank of Canada Rates Hold Steady: What You Could Do to Adjust Your Mortgage Payment

The interest rate environment has been a wild ride lately. Business, economic and geopolitical environments have conspired to create uncertainty, and mortgage holders often feel it most. Have you ever paid this much attention to Bank of Canada interest rate announcements?  While the Bank of Canada announced that rates are holding steady for now, they dropped seven consecutive times before this!

Meanwhile, changing mortgage rules have further spiced up the mortgage landscape for homeowners. But change isn’t always unsettling. In fact, it could present an opportunity – especially when it comes to your mortgage. By making smart adjustments, you could tailor your mortgage to better fit your lifestyle, improve your cash flow, or match up with your long-term goals. All it takes is a bit of number crunching.

Matching your mortgage to your life

Do you want to pay off your mortgage as quickly as possible? Do you need a little breathing room in your budget? Is your payment schedule out of sync with your paycheque? Take a look at how you could flex your mortgage – and how the RBC Payment Mortgage Calculator can help you test out some scenarios.

Scenario 1: You want to pay as little interest as possible

Let’s be honest – your dream was to own a home, not a mortgage. So, if you want to pay down that mortgage as quickly as you can, there are ways to accelerate your timeline – and pay less interest over the life of your mortgage while you’re at it.

Let’s say you’ve got a $500,000 mortgage. With a 4.89% interest rate fixed for 5-year term and 25-year remaining amortization, your monthly payments would be $2,876.80.

Let’s also say you have flexibility in your cash flow. If that’s the case, you could choose an accelerated bi-weekly payment frequency, where your bi-weekly mortgage payments would be $1,438.40. In this scenario, you would save $2,518.26 interest costs over your mortgage term and – if all else stays the same – pay off your mortgage more than 3 years sooner.*

Scenario 2: Adjust your payment frequency

Is your mortgage payment a little too heavy each month? Would life be easier if instead of a monthly payment you could break it up into a bi-weekly or even a weekly payment?

Use the RBC Mortgage Payment Calculator to see how much that monthly payment would be if you split it up. Just edit the payment frequency to see the numbers.

Scenario 3: Extend your amortization to bring down your mortgage payments

Life can be expensive – especially when you own a home. You may need to do repairs, maintenance or spruce things up. What if there was a way to bring down your mortgage payment. Would that help?

If you’re in the market for a new mortgage, you’re ready to renew or thinking about refinancing your mortgage, you may be able to extend your amortization period. In fact, with new mortgage rules introduced late last year, first-time homebuyer and buyers of new builds could qualify for an amortization period of up to 30 years.  

Let’s use our $500,000 mortgage at 4.89% interest rate example again. If you qualify to increase your amortization from 25 years to 30 years, you could reduce your monthly payment amount by $241.09. That difference could provide the breathing room you need. Just know that it would increase the total interest cost you would pay over the life of the mortgage and add another 5 years to your timeline*.

Bottom line: Interest rates and mortgage rules may be out of your hands, but how you manage your mortgage payments doesn’t have to be. By using RBC Payment Mortgage Calculator, you can test out your payment options to see how your mortgage can fit with your life and your goals.

Even better, you don’t have to crunch the numbers on your own. Whatever your situation and priorities, an RBC Mortgage Specialist can help you choose – or adjust – a mortgage so that it works for you. 

When is the next Bank of Canada announcement?

Staying up to date on the interest rate environment can help you make informed mortgage decisions – and prepare for any adjustments needed to stay on track with your homeownership and financial goals.

The next Bank of Canada interest rate announcement is June 4, 2025.

*This scenario is based on a 5-Year Fixed Interest Term; it is for illustrative purposes only and is not intended to provide specific financial or other advice.

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