Bank of Canada Increases Overnight Interest Rate

Where’s the best deal? Where do we go from here?

Bank of Canada Increases Rates by 0.50% → Still lower than 2019 rates – Watch Video

Bank of Canada increased their overnight lending rate to 1.00%, this is still 0.75% lower than pre-pandemic levels.

This rate hike will increase the lenders’ Prime rate from 2.70% to 3.20%. The pre-pandemic Prime-Interest rate was 3.95%.

Even with the future anticipated rate hikes, the variable rate mortgage is still an excellent deal when compared with the current fixed rate mortgages. Some lenders are still offering variable rate mortgages @ Prime – 1.00% (3.2% – 1.00% = 2.20%)

For those clients wanting a great mortgage rate as well as a fixed payment there are options available with a shorter term (2 & 3-year) fixed-rate mortgage, or consider a Capped Variable Rate Mortgage.

Fixed-rates reclaimed pre-pandemic levels last week and are finally showing the first signs of resistance from raising higher.

It is worth noting that the Bank of Canada’s goal is to reach an average inflation target of 2% over a 5-year period. It is possible we will see one more aggressive rate hike in the near future, but I am anticipating the bank will wait to see the affects these rate hikes have on the economy. It takes 3-6 months for the economy to absorb a Bank of Canada rate hike.

I am available for any financing and strategy questions.

Best,
Adam Sale Mortgages
778-215-4121