Consumer fixed-rate mortgages are about to get cheaper following a 15 basis point rate reduction announced by the Royal Bank of Canada (RBC).

Canada's largest lenders are expected to immediately follow RBC's lead with their own revisions that will yield 3.74% five-year fixed-rate mortgages and represent a 0.15% drop from the current 3.99% rate.

Although small in the grand scheme of the lending equation, new homeowners anticipating mortgages valued at $500,000 will see a savings of approximately $40 per month at 3.74% compared to 3.99%.

This good-news announcement following a year of negative impacts on the market (which include the mortgage stress test, new taxes in British Columbia, and rising interest rates) could help spark purchasing activity during what is traditionally the slowest sales period of the year.

Mortgage rates in Canada have been rising since 2017 in-line with increases to the key lending rate set by the Bank of Canada. Several rate increases over the last 24 months saw the key lending rate rise to 1.75% from 0.75% in response to strong economic activity. Analysts, however, are mixed on whether rates will continue to rise, remain stable throughout the year, or even dip. C

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Homeowners in BC's spex tax zones required to declare property usage by March 31 or face fees