The Bank of Canada on Wednesday 6 December announced it will be holding its interest rate at 5 per cent, which is a positive sign for Canadian mortgage holders. However, challenges will remain as the cost of borrowing stays at high levels for the foreseeable future.
Regardless, this news is likely to be welcomed by many, according to Daniel Vyner, Principal Broker at DV Capital. He added that the news will come as a relief to many homeowners, particularly those that were expecting a rate hike. Of course, the aim is to bring them down lower still, but the global battle against inflation still continues.
Victor Tran, a Real Estate Expert for Ratesdotca Real Estate, added that many of his clients had started “leaning toward” fixed-rate mortgages because of the added security they provide. However, he went on to say that variable rates are becoming more popular again on the appearance that interest rates are coming under control.
Co-CEO of Ratehub.ca, James Laird agreed with Mr. Vyner, repeating that the news is good news for mortgage holders. He added that anybody with a home equity line of credit or variable rate mortgage is likely to be happy to see inflation decreasing. He pointed out that the latest news means we might see interest rates reduced some time next year, giving much cause for hope for the future.
Despite the good news, many Canadians are still facing financial difficulties because of high borrowing rates. This was the view of Victor Tran real estate expert for Ratesdotca. He added while their mortgage repayments are unlikely to go up, everything is still more expensive than it has been in the past.
The Head of Insurance, mortgage and Banking Solutions, Alana Riley said that while the latest news is promising, Canadians should still expect lots of uncertainty in 2024. She added that multiple variable will have an impact on mortgage holders, and that interest rates will be affected by any disturbances in the market.
Riley also went on to suggest that mortgage owners may need to take a proactive approach to help them navigate potential rate changes and other economic conditions. For example, she said that mortgage holders should keep up to date with the latest economic developments to help them adjust accordingly as needed.
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