AgentBas- Mortgage Agent

01/26/2023

A 25 point interest rate hike was announced as expected today from BoC. Some key points below:

- Overnight key interest rate now sits at 4.5% and Prime at most lenders now set at 6.70%

-This will increase most variable mortgages about roughly $15 per $100,000 mortgage (unless you are in a VRM- a variable product with a static payment)

- If you are in a VRM then more of your payment is now going towards interest vs principal and you may be reaching your trigger point- if you haven't already

- Fixed rates are unaffected by this announcement as always

- BoC is hoping this is the last hike in this rate hike cycle (finally!)

- Inflation continues to trend down, currently sitting at 6.3% down from it's peak of 8.1%

- Even with inflation coming down, we shouldn't expect any rate cuts in the near future- we are likely in a holding pattern for at least a few months, barring any sudden global economic changes

- A recession in 2023 is still very possible, but current forecasts show it could be more mild than originally feared

Still have questions, need explanations, or want to chat? Feel free to contact me anytime :)

If you want to learn more read the article below:

The Bank of Canada's key interest rate now stands at 4.5 per cent following eight consecutive increases aimed at cooling inflation.

01/24/2023

Bank of Canada's 1st interest rate announcement is tomorrow. Expect an increase of 25 basis points. Will it be the last of this rate hike cycle? Hopefully BoC will shed some more insight tomorrow. Below BoC's 2023 interest rate announcement schedule.

09/08/2022

Another rate hike. This time 75 basis points.

Key points:

- This is is the 5th rate hike announcement of 2022
- This brings the overnight rate to 3.25% up from 0.25% in March
- Prime rate (which is used to determine variable mortgage rates) is now 5.45%
- Even though inflation has dropped from 8.1% to 7.6%, the drop has mostly been due to gas prices, while other prices like food and services remain high, hence the reason for the hike
- Further hikes in 2022 have been hinted at (next announcements Oct 26 and Dec 7)
- Hike is expected to continue the recent trend of decreasing home sales and property values

Read more here:

The Bank of Canada today increased its target for the overnight rate to 3¼%, with the Bank Rate at 3½% and the deposit rate at 3¼%.

07/13/2022

A BIG 1.00% rate hike from the Bank of Canada today.

Key points:
- Considered a "quadruple hike" since the average hike is typically 0.25%
- Largest rate hike since 1998
- Hike due to continually rising inflation
- Inflation largely due Russia/ Ukraine war, ongoing supply chain issues, and excess demand in Canadian economy
- More hikes are likely throughout the rest of 2022 (BoC announcements scheduled on September 7, October 26, December 7)
- This hike will increase most variable rate mortgage payments by about $50/ $100,000 mortgage
- Fixed rates are unaffected by this announcement, but are expected to continue to rise as well
- The benchmark interest rate is now 0.75% higher than it was pre-covid
- Hike is expected to continue the recent trend of decreasing home sales and property value growth

Read the article below to learn more:

The Bank of Canada has hiked its overnight interest rate by 100 basis points to 2.5 per cent, following higher than-expected inflation. It is the biggest rate hike by the central bank since August, 1998.

07/12/2022

Prime Rate will likely increases by 0.75% tomorrow. Check in to see how this may affect your current mortgage or future purchases

06/13/2022

Rates continue to go up! Feel free to connect to discuss how you can protect yourself in this rising rate market.

06/01/2022

Another .50% rate hike from the Bank of Canada today.

Key points:

- Another "double hike" since the average hike is typically 0.25%

- Rate increase was made to combat increasing inflation

- More hikes are likely throughout the rest of 2022

- This will increase most variable rate mortgage payments by about $25/ $100,000 mortgage

- Fixed rates are unaffected

- The benchmark interest rate is still 0.25% lower than it was pre-covid

Read the article below to learn more:

The Bank of Canada today increased its target for the overnight rate to 1½%, with the Bank Rate at 1¾% and the deposit rate at 1½%.

04/14/2022

Bank of Canada raised it's benchmark interest rate by 0.50% today.

Key points:

- This was a "double hike" since the average hike is typically 0.25%

- Hike was due to over-inflation mostly caused from Covid and the Russia-Ukraine conflict

- More hikes are likely throughout the rest of 2022

- This will increase most variable rate mortgage payments by about $25/ $100,000 mortgage

- Fixed rates are unaffected by this hike, but Bank of Canada also announced they will be continuing to decrease their Quantitative Easing- a monetary stimulus used to combat the economic ramifications of Covid, so fixed rates should continue to rise in the coming months as well

- The benchmark interest rate is still currently 0.75% lower than it was pre-covid

Read the article below to learn more:

The Bank of Canada raised its key interest rate by 0.5 per cent for first time in 22 years to battle soaring inflation.

03/29/2022

Many people don't know this but the Federal mortgage stress test (qualifying rate) is currently set at the higher of a) 5.25% and b) contract rate + 2.00%. With rates being so low since they changed the Stress Test rules, the majority of mortgages were being qualified at 5.25%. However interest rates, especially fixed rates have been going up quite a bit in the last few months. 5 year fixed rates for conventional purchases at most Big Banks are typically coming in at around 3.79% right now. Interest rates for rentals and refinances are even higher. A contract rate of 3.79% has to be qualified (stress test) at 5.79% (contract rate + 2.00%) instead of the 5.25% lenders have mostly been using recently. This means borrowers looking for a 5 year fixed product will qualify for a substantially lower mortgage than they were just a few weeks ago.

As a mortgage agent I have creative solutions around this issue where you will still be able to qualify at 5.25% (or even lower). Feel free to contact me to learn how :)

03/03/2022

Key Takeaways

- Benchmark rate increased from 0.25% to 0.5%

- On average this will increase most variable rate monthly mortgage payments by about $12 for every $100,000 mortgage

- This does not affect fixed rate mortgages

- The reason for the increase is mostly to combat rising inflation

- More raises are likely throughout the year (there are 6 more BoC interest rate meetings left in 2022)

- If you recently locked in a variable rate mortgage you were most likely saving about $60/ month for every $100,000 compared to what 5yr fixed rates were being offered at the time- so you are still saving money on your variable rate vs fixed

- For prospective homebuyers, with a large spread still remaining between current variable rates vs fixed rates, along with the added flexibility of variable products vs fixed products (ex. lower penalties), variable products/rates are still attractive if you have a little appetite for risk

01/25/2022

Here are the dates in 2022 when the Bank of Canada releases it's updated target for the overnight rate. For variable rate mortgage holders these are the dates that your mortgage interest rates could change (although in an emergency the BoC can change rates anytime). If there are changes to the overnight rate, thus your variable rate, they are usually made in 0.25% increments at a time.

12/10/2021

Bank of Canada holds the Benchmark Interest Rate

Key Points:
- Prime Rate remains at 2.45%
- Interest rates for variable rate mortgages, HELOCs stay the same
- When economy stabilizes further BoC have said they will begin raising interest rates
- Rate hikes are currently expected in the middle quarters of 2022 (though nothing is certain with rates)
- This doesn't affect fixed rates at all since fixed rates are influenced by Canada's 5yr bond yields, not the benchmark interest rate set by BoC

Read more about it here:

The Bank of Canada held its benchmark interest rate steady on Wednesday, noting that record high inflation is showing signs of cooling down.