The Bank of Canada raised its benchmark interest rate three-quarters of a percentage point and signalled that the key rate “will need to rise further” to tackle high levels of inflation. The central bank’s policy rate now stands at 3.25 per cent. This marks the fifth rate hike so far in 2022 — Canada’s key interest rate sat at just 0.25 per cent in January.
Passing the three per cent bar is significant, as it takes the bank’s policy rate past what it believes to be the “neutral range” and into territory where it is now actively suppressing the economy in an effort to take steam out of the Canadian economy and discourage consumer spending demand, dampening domestic fuel for inflation. This year has marked historic rate changes with additional changes predicted to follow. These changes are big and effect both spending power for Home Buyers as well as budgets for Home Owners. Whether you are applying for your first mortgage or you are needing to remortgage, we are here to help you navigate rate changes with confidence, Mission35 is here to help you understand how to navigate these historic rate changes.
How Can You Get Ahead of Rate Changes??
1. Get Informed! Let Mission35 help you understand the difference between a variable and fixed mortgage to discover which option will work best for your needs.
2. Act Now! Thinking of buying? Lock in a pre-approval and rate hold to avoid being affected by additional potential hikes.
3. Plan Ahead! Crunch the numbers and perform a personal 'stress test' to determine how future rate changes could affect your budget. When it comes to changing rates, both variable and fixed mortgages are affected. The best thing a person can do is plan ahead.
Whether you are fixed or variable, the one thing that is certain is that rates are changing and your household will be affected. When choosing a lender for your next mortgage or refinancing, regardless of the state of the market, the goal is to always get the biggest bang for the buck. With a little planning and prep, Mission35 can help you get ahead of new rates. Curious to learn more? Questions and concerns about changing rates? Don't hesitate to reach out, we are here to help and answer questions!