March home sales and new listings set records in Metro Vancouver VANCOUVER, BC –…
Bank of Canada Governor Stephen Poloz addressed the media yesterday with an update on the Canadian economy and what to expect with monetary policy as we move further into 2019. The big take away? Don’t hold your breath for an increase to the prime lending rate in the coming months.
Moving out of 2018 and into 2019, there was widespread expectation of multiple rate increases over the course of the year. Yesterday, however, any talk of an increase to Prime has been put on the back burner in favour of a more “accommodative” monetary policy. And while the Bank of Canada certainly does not want to drop rates unless they absolutely have to, the likelihood of a rate drop in 2019 is at the very least, an interesting talking point.
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So what does this mean for borrowers? If you’re tied in to a variable rate mortgage, loan or line of credit, you can breathe a little easier knowing that your payments aren’t likely to increase any time soon. Though Canada is still quite strong in our employment and wage growth, other areas that affect our economy, like slumping oil prices and foreign trade disputes, are still holding back growth enough that a rate hike just isn’t in the cards for the time being.
For fixed rate borrowers, bond yields and rates have come down quite a bit since the start of 2019. It’s likely that we’ve seen a short term peak in interest rates and we’re heading back down a path of the low rates we’ve gotten used to over the past number of years. And with these lower interest rates now back in the forefront, we should expect to see a slight boost in housing demand over the coming months.
If you would like to discuss your current mortgage and options, or, if you’re thinking now is the time to get pre-approved, please don’t hesitate to reach out. We’re happy to go over any and all options for you and give you the answers you need to help make your best decision.
All the best!