After reading the Bank of Canada’s press release after it’s last rate announcement on April 13th, it is quite clear that they believe that we will be in a higher inflationary zone till almost 2024. What this means is that we have definitely not see the last of the Bank of Canada rate hikes. Our CPI numbers were released after the BOC met and blew away their prediction of a 6% rate when we hit 6.7%.
Some in my field are even saying that the BOC’s target for the prime rate will hit 5.20% before things start to settle down. Just so you don’t have to do the math that is a full 200 basis points or 2% higher that we are right now. By reaching those rates it will also take us closer to parity with the 5 year fixed rate when the discount to prime has been calculated in for clients.
That being said I am still going to stick it out with my variable rate, however clients who are in a variable rate have to decide themselves if they will sleep better at night by increasing their rate by switching from a variable to a fixed. The current spread in the difference is between 1.5 – 2% from the variable to the fixed, but without the rate volatility that the variable is going through.
I look forward to hearing from you in regard to your mortgage needs.
p.s.s- I should tell you that I am licensed in Nova Scotia Brokerage (2021-3000179) Broker (2021-3000180), Ontario(M18001555) & in British Columbia(BCFSA #504098).
p.s.s.s You can download my new mortgage app here