Today’s Rate Announcement, And Where Mortgage Rates Are Heading - Best Mortgage Broker Rates

Today’s Rate Announcement, And Where Mortgage Rates Are Heading

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The Bank of Canada announced this morning that they will be maintaining their overnight rate at 0.25%, which means prime rate will remain at 2.45%. Surprise, surprise, surprise.

They remain committed to maintaining the status quo until sometime in the second half of 2022. No increases or decreases expected along the way. The US on the other hand is not expecting to increase their rate until late 2023. Usually, Canada will follow the US, so it will be interesting to see if they come through with their current prediction. If they do, then this would close the gap between the Canadian and American currencies. While a high Canadian dollar may sound good, particularly if you like to travel south, it makes us a less attractive trading partner to our friends in the US. This would be bad news for our economy considering that 80% of Canadian exports are to the US. For this reason, increasing ahead of them would be a bold move. It will be interesting to see if they make any adjustments here.

Fixed Mortgage Rates Steady….. For Now

Fixed mortgage rates have been relatively stable since early April, and I would expect them to remain somewhat stable through July and into August. While fixed mortgage rates have increased since the start of the year, they are still ridiculously low by historical standards. Prior to early summer 2020, the lowest 5 year fixed rate in history was 2.14%. Anything under 2% was unheard of, and it took a global pandemic to drive them down to current levels.

As business start to reopen, and more of the population becomes vaccinated, consumer confidence will continue to rise. With rising confidence will come rising spending, which will continue to push our economy forward. As economic strength continues to build, fixed mortgage rates will start to rise. It’s just a matter of time.

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Paul Meredith is the author of the Amazon #1 best selling book, Beat the Bank – How to Win The Mortgage Game in Canada, and has ranked as one of the top 75 mortgage brokers in Canada since 2016. He was a finalist for Mortgage Broker of the Year in 2018 - 2021, 2023, and can be seen as the exclusive mortgage broker on season 2, 5-7 of TV’s Top Million Dollar Agent.(Global, Slice TV and Rogers)