Date: March 8, 2023
Today’s Bank of Canada Update
This update is geared toward those with a variable or adjustable mortgage; however, this is good information for everyone.
Today the Bank of Canada (BOC) met to discuss their decision on the target for the overnight rate, which affects variable rate products.
Here’s the outcome of today’s decision.
The Bank of Canada held the overnight rate at 4.5%- no change today.
We’ve had much apprehension and speculation about what the Bank of Canada (BOC) would do today with the overnight rate. To the relief of many, the BOC decided to hold the overnight rate today in its first-rate hold of 2023.
This means all you variable and adjustable-rate mortgage holders can take a deep breath until April 12, 2023!
Typically, we see Canada follow the US; however, the BOC has decided to pause and hold this time, likely since our inflation numbers are lower than the US at this time.
Currently, our inflation is sitting at 5.9%, with the BOC aiming to be down to 3.5% later this year and a target of 2% overall.
The BOC has stated it’s in a holding pattern but is prepared to increase further if needed, so we are still in the woods.
Senior Deputy Governor Carolyn Rogers will explain the rationale for holding the overnight rate tomorrow.
We also need to address what’s been happening on the fixed rate side of mortgages. Over the last two months, we’ve seen the five-year bond go from as low as 2.79% to today’s rate of 3.51%, and that’s translated to the increase in five-year fixed rates.
It’s essential to address the fact that the 2-3 year bonds have also increased over the past few months. For example, the two-year bond was as low as 2.94% mind January when most people are looking for a 2-3 year mortgage term; today, the two-year bond sits at 3.48%, pricing the 2-3 year terms often higher than the five-year fixed term.
Click Here to read the Full Bank of Canada Statement Here
The next scheduled date for announcing the overnight rate target is April 12, 2023.
The next set of inflation numbers will be available on March 21, 2023.
Mortgages can be complicated; we are here to help you make “cents” of it.
We focus on Mortgage Solutions, Period!
To learn more connect with Ana Cruz 905.870.0513 or email at email@example.com