Hey there, fellow mortgage enthusiasts! - LOL Joking no one cares about this stuff as much as us brokers do - It's Emily Miszk, your trusted guide through the twists and turns of the Canadian mortgage landscape. Today, let's talk about the latest rate announcement from the Bank of Canada and what it means for us, mortgage holders extraordinaire. - I am in an ARM mortgage and have a HELOC so you know - I am personally watching.... the NO change announcement again...
So, here's the scoop: The Bank of Canada, in its latest move, decided to keep its trend-setting overnight lending rate steady at 5%. Yup, you heard it right – no change in the horizon since July 2023. And what does that mean for us with variable-rate mortgages? Well, hold onto your hats because there's no change in our monthly payments. The Prime rate remains at 7.2%, and our wallets can breathe a sigh of relief – for now. If of course 7.2 is something you think is breathable.
But wait, didn't we hear whispers of potential rate cuts floating around? Indeed, optimism was brewing, especially after a promising February inflation report danced into the picture, showing a snug 2.8% within the Bank's 2-3% inflation target band. Market folks were even pricing in a 60% chance of rate cuts by June, but alas, the Bank seems to have other plans.
Inflation, it appears, is still a tad too high for the Bank's liking. They're playing the wait-and-see game, keeping a close eye on the inflation dance floor to make sure it grooves in the right direction. And while recent improvements are noted, shelter inflation and mortgage interest costs are still hogging the spotlight, exceeding the Bank's comfort levels. The Core measures are also giving them a bit of a headache, hovering above the target at 3%. But hey, it's not all doom and gloom – there's a downward trend in sight, folks. #letsgo
BoC Governor Tiff Macklem is doubling down on this stance, keeping a hawk's eye on underlying inflation and assuring us that monetary policy is doing its thing. Economic growth is expected to get a boost in 2024, especially in the housing market. So, what does this mean for us mortgage aficionados?
Well, if you're rocking a variable-rate mortgage, it's time to embrace a bit more patience. No changes for us just yet. And for those eyeing the fixed-rate lane, don't expect much turbulence either. Bond markets were expecting today's announcement, so fixed rates remain pretty much where they were.
Now, let's talk about housing market vibes. The spring season is showing promise, with home sales and listings on the rise. Enthusiasm is in the air, fueled by anticipation of lower mortgage rates. However, today's announcement hasn't exactly set the market on fire. Prices are holding steady, waiting for the next twist in the mortgage rate saga.
So, there you have it – another day, another rate announcement. While the waters may seem calm on the surface, there's always a current of change lurking beneath. Stay tuned, fellow mortgage mavens, for the journey ahead is always an interesting one! The next announcement will be June 5th when hopefully like Oprah I will be announcing rate cuts like she gave away cars. You get a rate cut! You get a rate cut! At the very least - I will have cake.
PS sorry for the rude photo I am getting edgier in my old age and after the past 2 years for my clients and my own personal mindset I am looking forward to an actual rate cut vs talk of when it could possibly happen LOL #fromyourhonestbroker