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(Oct 31, 2023)

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In the latest episode of Mortgagenomics Canada Podcast, I talked about the Bank of Canada’s recent announcement, dissecting what it means for Canada’s mortgage market. The decision to keep the overnight rate at 5% comes as a huge relief for borrowers and homeowners, particularly those with variable rate mortgages.

The Bank of Canada’s Pause: What it Signifies

On October 25, the Bank of Canada chose to maintain the overnight rate at 5%, thereby also maintaining the consumer grade Prime Rate at 7.20%. This marks the third consecutive pause since July 2023, suggesting a shift in the bank’s choice of inflation fighting tactics. While previously, the primary means of curbing inflation was achieved by frequent quarter point rate hikes, the bank now seems to be prioritizing other economic indicators. They are closely monitoring GDP and employment figures, searching for any signs of unusual economic growth that could further drive inflation. Additionally, they maintain their warning statement about being “prepared to raise the policy rate further.”

This shift signifies a move away from the broad-scope monetary policy methodology, where the primary question was whether to raise or maintain the overnight rate. This change is akin to switching from a big, blunt volume knob to fine-tuning dials, offering more precision and control.

Mortgages in Canada: What to Expect

Many economists are predicting that the era of rate hikes has come to an end, with expectations of a reversal in mid to late 2024. However, continue to be cautious in your approach when it comes time to make a product/term selection. Remember, economist predictions are not always 100% reliable, so continue to stress-test your financial situation and be disciplined in your approach.

When it comes to product choice, I’m a big fan of variable rate mortgages right now (as of the past couple of months or so)…the security of a 1, 2 or 3 year fixed rate just isn’t appealing to me at this time, especially after the recent slew of economic data sets. If you’re unsure what to do, give me a call and we’ll have a short conversation about your circumstance and I’ll tell you what I think. Don’t be afraid, shoot me a text or give me a call, 604-800-9593.

Here’s What’s on My Desk: A Glimpse into Current Mortgage Trends

The mortgage landscape is dynamic, and it’s essential to stay informed about ongoing trends. Currently, there is a mix of files on my desk, ranging from unique challenges to standard transactions:

If you’re concerned about your mortgage prospects or need advice, don’t hesitate to reach out. We’re here to provide transparent guidance and help you navigate your unique financial journey.

Wondering about your next move? Call or text Marko Gelo right now at 604-800-9593, or Click Here to schedule a free, no-obligation phone call with Marko. You can also call Marko on WhatsApp.

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