We are starting a new rate update to be presented 8 times per year to co-inside with 8 times per year the Bank of Canada updates their rates. These rates directly effect variable rate holders. Fixed rates are generally more impacted by the Canada bond yields. We will include a summary of what is happening with the fixed rates as well in this update. If you want to received our rate updates to keep update on mortgage rates please click here to sign up!
Key Points:
1. Bank of Canada has maintained their overnight rate at 0.25% (No Change)
2. Variable rate mortgage holders: Your interest rate has not changed.
3. The Bank of Canada has indicated that they expect to look at a rate increase sometime between April and September next year.
4. High inflation is expected to continue into the first half of 2022
5. Job growth and economic growth have been strong
6. The Bank still has concerns about the devastating floods in BC and Uncertainties from the Omicron variant that “Could weigh on growth by compounding supply disruptions and reducing demand for some services”
Fixed Rate Update:
Fixed rates have creeped up a bit over the last couple of months with steady increases in bond yields.
Our Thoughts:
We are seeing a lot of clients take variable rates right now. Variable rates have a much lower penalty to break (Refinance/sale of home). Furthermore, right now there is a large gap (over 1%) between variable and fixed rates. This is creating a big interest savings between the two.
Example: $400K mortgage (25 year amortization) – monthly payment savings of over $260.00 per month between fixed and variable rates right now.
Have questions? Please reach out to us anytime!
Check out the official Bank of Canada Rate update here: https://www.bankofcanada.ca/2021/12/fad-press-release-2021-12-08/