"Bank of Canada Holds Interest Rates: What This Means for Buyers and Sellers"

Bank of Canada Holds Interest Rates: What This Means for Buyers and Sellers

The Bank of Canada has decided to keep the interest rate at 2.75% for the second consecutive time. This rate stability could be good news for buyers who have been waiting for the right time to jump into the market.

Here’s what this means for you as a buyer or seller:

1. Variable-Rate Mortgages and Lines of Credit

For buyers with variable-rate mortgages or lines of credit, your rates will stay the same. This gives you some certainty when it comes to monthly payments as you plan your next move in the market.

2. Fixed Mortgage Rates

While fixed mortgage rates have been a bit unpredictable recently, most lenders have kept them steady. If you're looking to lock in a rate with stable payments, now could be a great time to consider short-term fixed rates, like a 3-year term.

3. Why the Bank Decided to Hold Rates

The Bank of Canada is taking a cautious approach due to uncertainty around U.S. trade policies, which may impact inflation and economic growth here in Canada. This means that we could see some changes ahead, but for now, rates are staying put.

4. Expecting Future Rate Cuts?

Some experts believe the Bank of Canada may reduce rates later this year. That said, many buyers are still choosing short-term fixed-rate mortgages (like 3 years) to lock in predictable payments but remain flexible in case rates go down further in the future.

5. Affordability Is Improving

Since June 2024, the 2.25% drop in rates has made buying a home a bit more affordable. If you’ve been waiting for a better time to buy, this rate drop might just be the push you need to get into the market.

6. Buyer's Market: A Great Time to Buy

With more homes available and a shift toward a buyer's market, now could be an ideal time to make an offer before more buyers jump back into the market. This shift gives you more choices and the potential to negotiate better deals.

7. Current Mortgage Rates

Here’s a quick look at today’s mortgage rates for owner-occupied properties:

• Variable (insured, <20% down): 4.15% (about $534 per $100,000 on a 25-year amortization).

• Variable (uninsured, 20%+ down): 4.34% (about $495 per $100,000 on a 30-year amortization).

• 5-year Fixed (insured, <20% down): 3.89% (about $520 per $100,000 on a 25-year amortization).

• 5-year Fixed (uninsured, 20%+ down): 4.19% (about $487 per $100,000 on a 30-year amortization).

• 3-year Fixed (insured, <20% down): 3.89% (about $520 per $100,000 on a 25-year amortization).

• 3-year Fixed (uninsured, 20%+ down): 4.09% (about $480 per $100,000 on a 30-year amortization).

Why Now Could Be the Time to Act

• Rates are stable – this could be a good time to act before more changes happen.

• Affordability is improving – the rate drop gives you more purchasing power.

• It’s a buyer's market – there are more options available, and fewer buyers are active in the market, giving you more negotiating power.

Whether you're buying or selling, this could be the perfect time to make your move. If you have any questions or want to talk more about how these rate changes might impact your buying or selling decisions, feel free to reach out. I'm here to help guide you through it!