Good news today with the Bank of Canada’s last announcement for 2023 and they have left the overnight target rate, which affects the Prime rate unchanged for the past 5 months.  Prime is currently at 7.20%. This means no rate or payment changes for Variable Rate mortgage holders.  Here’s a visual on what the BoC rate has done over the past 18 months.

We also have received welcoming news from some of our top lenders with a reduction to fixed rates today which peaked in October of this year and should have started dropping sooner but haven’t.  Fixed rates are affected by the 5 year Bond yields and they have been dropping consistently for the past 6 weeks but banks have been slow to follow with lowering interest rates for homeowners. Here’s a visual of what the bond rates have done since Spring of this year.

Part of my daily read and research is following the predictions of our top economists. The prediction is that we won’t see any drops to the Prime rate until sometime between April and July of next year but keep in mind that those are just predictions based on data we are seeing today and forecasting of what will come.  Currently we are expecting that we will see rate drops over the course of 2024 by about 1% and 2% by the end of 2025.  That would mean that those in a Variable will experience lower rates and payments within the next 24 months.  Something we will all welcome.

So what is the favorite rate as of today?  Variable for the win again…with rates still high, inflation has not taken care of itself quite yet and the BoC is going to be very careful when they do cut rates to not spur the economy and housing market too much or we will be back at square one. We’re almost guaranteed to get random economic scares that raise doubts about the Variable Rate, yet for well-qualified borrowers, the outlooks suggests: go Variable or go home.  But, it’s still not for everyone, let us help you determine if this is the best fit for you.

The Bank’s next interest rate announcement lands on January 24, 2024.

If you are considering purchasing, refinancing or renewing your mortgage, do not wait.  Buyers are waiting until Spring so don’t get caught up in the frenzy in a few months and buy now while you have more choice, less pressure and declining rates.  We will have all the other details covered for you from a rate hold, recommendations for Real Estate partners, Lawyers and Notaries and everyone in between.

Have a wonderful rest of the week and please contact me with absolutely any questions.

Trish

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