Unfortunately, that prediction changed over the past 60 days and we’ve now seen the interest rate held at 5% for the sixth consecutive time. The BoC has done a great job at reminding us that its first rate cut - and future ones - will be data dependent and the data is just not supporting it enough right now for it to take the plunge.
Factors driving this decision are things like oil prices, which are at the highest they’ve been in over five months. Plus, inflation has not yet reached the target that economists are hoping for, and the economy is stronger than expected. Despite the weaker employment data from last week, I do believe that if the BoC had made its first rate cut this month, it would continue to spur on an already heated real estate market.
Even with these higher interest rates, the spring housing market continues to heat up, with some if not many listings going into multiple offers and many sales coming in over asking price points - not something the BoC takes lightly when looking at reducing rates.
Stability over savings for now.
And when the BoC decides to make its first rate cut, it will be very slow and methodical in doing that, in order to not charge the economy and housing market any more than it already is. I follow top economists Canada-wide on a daily basis and based on these forecasts, there is still confidence that we should see that first rate count come in June of this year.
Again, after the first one, unless there is some other drastic change, I think that any future cuts will be slow and steady as the bank watches how it impacts markets across Canada.
Quote
“ ”
I think that any future cuts will be slow and steady as the bank watches how it impacts markets across Canada.
Trish Pigott
DLC Primex Mortgages
Choose your mortgage wisely.
Our team is heavily focused on affordability and household budgets right now. For any new homebuyer or existing homeowners going into a new mortgage term, paying attention to your household budget, along with your ability to afford the new payments, should be the most important determining factor on your next mortgage term and product. Rather than worry about minor differences in interest rates, take a look at what you can afford and how comfortable you will be with that payment for the next term.
The majority of people only know to look at the interest rate and yet there are so many other important factors to a mortgage overall. Things such as making extra payments, whether the mortgage can be ported (moved) to a new property without penalty and how that lender calculates a penalty in case you need to make a change midterm. And let’s not forget about service - some of the major banks are not great at servicing you as their customer, so having your mortgage with an institution that allows you to have your mortgage broker represent you after the mortgage is complete can save you countless hours of stress and frustration.
Our team at Primex is committed to providing clients with all those options when presenting different mortgage lenders and products that are available today. Making informed decisions is the best and only way to navigate this market in my opinion.
Learn more about Trish
