Bank of Canada Announces No Interest Rate Hikes Until 2023!
The Bank of Canada (BOC) has confirmed that there will be no interest rate hikes until 2023. However, this does NOT confirm that the banks will follow suit. As we’ve already seen earlier on the pandemic, the BOC lowered the overnight lending rate and the banks mortgage rates started increasing. Existing variable rates on the books were becoming less expensive to the consumer and with all of the uncertainty surrounding COVID-19 the banks elected to raise interest rates to account for this.
We are still in a very unfamiliar and uncertain lending landscape and there is no telling what the banks will elect to do should the forecasted “second wave” of COVID-19 come around October/ November as projected. Will we see another interest rate spike from the banks? We have yet to see the true impact of COVID as CERB loans assist those impacted by COVID, and CEBA loans support small business’s. I suspect within the coming weeks we will begin to see how COVID has really impacted the economy.
Needless to say, I expect the real estate market to heat up again as CERB and CEBA cease. Going back to my earlier comment surrounding rates, there is no better time to refinance or purchase a home than now (from an interest rate perspective, historically speaking). The banks will want to increase their spread as the market stabilizes and this usually indicates that rates will be on the rise.
Questions? Let me know and i’d be more than happy to assess your financial situation and see if we can save you some money by taking advantage of these low rates!
