Tuesday’s inflation announcement was a watershed moment for interest rates, and interest rate expectations. If you are applying for a variable mortgage, you’ll want to keep reading.
For the first time since February 2021, inflation finally came below the BoC’s target rate of 2.00%. The inflation rate actually dived well below the BoC target, and came in at a healthy 1.60%.
This is a clear indication that our economy is once again churning slow enough where demand isn’t exceeding supply by “too much”. Our economy isn’t going into a recession, but rather coming to a slower and more controlled slowdown. This is exactly what the BoC was hoping for.
BoC’s worries will now shift from inflation to a stagnant economy. One where supply outstrips our demand, and wages and even standard of living decrease. The BoC does not want us to enter into any sort of “negative inflation” territory. The BoC will continue to drop rates in order to keep our economy running at a slow and steady pace.
Whether It’s 0.25%, or 0.5%, it will keep going down.
I always say to clients to look at the long term, the bigger picture. Yes, we can probably now expect a decrease of 0.50% on the lending rate, but whether 0.50% or 0.25%, we know with some certainty that we are in the downward drop of this rate roller coaster. There probably will not be any climbs in rates for some time now.
One of my previous blogs was about how the banks react when the BoC cuts rates. This is more pertinent now more than ever. Because we may see a bigger drop in the BoC rate, we will probably see the variable rate discounts, or spreads, drop.
Read the last blog post here, and you’ll understand why you may need to take action before October 23rd, if you do want a variable rate and your mortgage renewal or purchase is coming up.
Don’t wait until October 22nd to call our office if you want to apply for the variable rate. Call or email us today to get an application in an lock in a good spread.
Rates are dropping fast. Pre-approval amounts will change. What you qualify for will change. The new mortgage rules that are coming into effect on December 15th add in an extra factor too.
Don’t risk getting a less than the best deal or bad advice by going to a junior banker or broker. We’re the pros in this space. Our rates and advice are top notch. See the review for Kamal below. You can see why we’re the best in the business.
We have specialty mortgage products, such as our cashback mortgage, and our 6 month special, which could help you qualify for more money, or help payoff unwanted nagging unsecured debt. See an example of our cashback special below.
Reach out and ask me any questions. We are here to help.
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