BREAKING NEWS! Bank of Canada Drops Interest Rates: Positive Impact on Ontario Housing Market!! Good news for homeowners and investors!
It’s been a while since we’ve heard some great news regarding interest rates, inflation and overall Canadian economic health, but we are pleased with the latest announcement to lower the BOC (Bank of Canada) rate this past week.
The Bank of Canada officially reduced its target for the overnight rate to 4.75%, with the Bank Rate at 5% and the deposit rate at 4.75%. The Bank is continuing its policy of balance sheet normalization. This is the first time they have brought the Policy Rate down to 4.75% in over 4 years. We couldn’t be more relieved by this news.
Great, but what does the recent drop in interest rates mean for YOU?
Lower Mortgage Rates are on the Horizon
If you have a variable rate mortgage, you’ll save money.
* For every $100,000 borrowed, you save about $15 per month.
If you have a renewal coming soon, you are in luck! Your next term will still not look like what you’ve been used to, but you will benefit from the new rates that are expected to come out in the coming days from the big banks on the new official mortgage rates.
Fixed Rates are still expected to be the most logical product for securing a mortgage in the remainder of 2024.
Increased Buying Power
Lower interest rates increase your buying power. We can expect a surge in first time home buyers and investors coming back into the market, especially the condo market, which has been saturated with more selection and empty units available for a quick closing and timeline to close.
Boost in Housing Demand
There is a massive pool of buyers sitting on the sidelines, waiting to get that thumbs up before jumping into the market. These are the buyers that don’t “need” to move but want to. The first rate cut is going to bring buyers back into the market with some confidence to step off the sidelines and take the risk to not only buy, but also sell their home.
**NOTE** The next scheduled date for announcing the overnight rate target is July 24, 2024. At that time the Bank will publish its next full outlook for the economy and inflation, including risks to the projection, in the MPR at the same time.
If you’re interested, click the link below to learn more about the factors that impact the rate change and overall economic health
https://www.bankofcanada.ca/2024/06/fad-press-release-2024-06-05