Bank of Canada Interest Rate Update - April 2023

The Bank of Canada met this past week and, for the second time this year, they have made the decision to leave rates where they are. No changes to interest rates at this time.

To read the full report on the April 12th announcement, please click HERE

The Bank has remained optimistic that we should see our target inflation down to 3% by the end of this year, and then back to our 2% target by the end of 2024. However, the Bank has outlined very clearly that they are prepared to continue their interest rate increases if necessary during this time. So, while this recent announcement has provided some relief, we are still expecting rates to remain elevated for the next 1-2 years while the Bank of Canada can monitor the impacts of the hikes and our inflationary data, and there is always a possibility that rates may rise further. As such, my top recommendation continues to be that we must ensure your financial house is in order so that you are better able to weather this storm, and I am here to help you through this. Please do not wait until it’s too late to reach out to me. If you have any high interest debt or are struggling with your payments, I am here to help.

The collapse of the US and European banks did not cause as severe of an impact as they could have due to quick Government backing and private financial support. However, we did see a drop in some of our fixed rate options due to the dramatic drop in bond yields during that time, and we do still have some lenders offering discounted interest rates. So, if a fixed rate feels safer for you, this may be a good time to consider it.

What does this rate announcement mean for you?

NO CHANGES FOR ANYONE! No changes for both fixed and variable rate mortgage holders this month.

If you are in a "fixed payment - variable interest" product...

And your payments have not changed over the past 12 months, then you have likely hit or passed your "trigger rate". It is important that you understand the consequences of this, so please reach out to me so that I can explain your specific situation and my recommendation for what to do.

Should I lock-in my variable rate now?

If locking-in to a fixed rate is something you are considering, let's talk. You may want to consider a 2-3 year fixed rate, which can offer you the fixed comfort today while still being able to renew at a time when rates are (hopefully) lower.

What am I doing?

I am not locking-in my variable rate mortgages at this time, as I do feel that we are going to see rates come down in the near future, exactly when is uncertain, but the fixed rate lock-in options are just not attractive enough for me to make that switch today. However, I have a higher risk tolerance, and will be able to manage if rates do happen to increase further before they drop. If you have any concerns, please let me know and let's work together to brainstorm the right strategy for you and your specific situation.

I want to lock-in to a fixed rate, what do I do now?

Contact your lender directly and ask them what rate they will offer you to lock-in. Request all terms available to you, including 2 or 3 year rates if possible. Once you have that information, if you would like our help, send it to me and I will help you with a strategy.

Our team is here to support you for any and all your mortgage and real estate needs, we look forward to hearing from you. And we will update you on the next Bank of Canada announcement, scheduled for June 7th.

I hope you have a beautiful day.