AgentBas- Mortgage Agent

Key Takeaways

- Benchmark rate increased from 0.25% to 0.5%

- On average this will increase most variable rate monthly mortgage payments by about $12 for every $100,000 mortgage

- This does not affect fixed rate mortgages

- The reason for the increase is mostly to combat rising inflation

- More raises are likely throughout the year (there are 6 more BoC interest rate meetings left in 2022)

- If you recently locked in a variable rate mortgage you were most likely saving about $60/ month for every $100,000 compared to what 5yr fixed rates were being offered at the time- so you are still saving money on your variable rate vs fixed

- For prospective homebuyers, with a large spread still remaining between current variable rates vs fixed rates, along with the added flexibility of variable products vs fixed products (ex. lower penalties), variable products/rates are still attractive if you have a little appetite for risk

Bank of Canada holds the Benchmark Interest Rate

Key Points:
- Prime Rate remains at 2.45%
- Interest rates for variable rate mortgages, HELOCs stay the same
- When economy stabilizes further BoC have said they will begin raising interest rates
- Rate hikes are currently expected in the middle quarters of 2022 (though nothing is certain with rates)
- This doesn't affect fixed rates at all since fixed rates are influenced by Canada's 5yr bond yields, not the benchmark interest rate set by BoC

Read more about it here:

Bank of Canada stands pat on interest rates, citing economy that has yet to fully dig out from the pandemic | CBC News The Bank of Canada held its benchmark interest rate steady on Wednesday, noting that record high inflation is showing signs of cooling down.