What BC Southern Interior Buyers Need to Know About the Midsummer 2021 Bank of Canada Announcement Regarding Borrowing Rates
The Bank of Canada (BoC) made their first official announcement of the season, and it’s a midsummer dream for buyers. If you are unfamiliar with the BoC’s press releases and the impact that they generally have on mortgage rates and the real estate market, we encourage you to gain some insight from our past articles (light reading!) on their announcements from June and May of 2021. Today, for the sake of our buyers out there (who just want to get to the beach) we’ll keep it succinct. But allow us some foreshadowing – it’s great news for you!
Lowest Variable Rate of All-Time?
For the first time ever, homebuyers in Penticton, the BC Southern Interior, and across Canada will have the option of getting the lowest variable mortgage rate to ever be offered. Rate hub is reporting on unthinkable (for lenders) variable rates that are lower than 1%. Less than one percent! This is happening because the Bank of Canada is revealing that the economy is growing at a moderately slower pace for the year than they previously predicted. While the health crisis is waning with greater vaccination rates, provincial and federal strangleholds on various markets and activities have kept the economy from bouncing back as fast as expected. It’s growing, but not enough to change the BoC’s trendsetting policy rate which currently stands at .25%. Seeing as the policy rate is directly tied to variable rate mortgages, experts would normally predict the latter to stand still as well, if not edge up after already experiencing record lows over the last annum. However, the BoC made it clear that it will keep their policy rate right where it is until the economy is ready to manage an increase. They have now stated that they don’t expect that to happen until the second half of 2022. And that, our friends, is why variable rates took a dive like tourists off the docks at Okanagan Lake.
So if you’re among those who don’t mind taking on a little risk (and we mean little at this point) for a reward (of lower payments and overall cost of a mortgage) then we could not be more clear – this is one of the biggest moments in history for getting a mortgage in the BC Interior.
Prefer fixed rates? Keep reading.
Fixed Rates at Rock-Bottom Too
We don’t want to steal thunder from what’s happening with 5-year fixed mortgage rates. While many predicted the average to land well above 2-percent for the summer of 2021, some lenders are currently offering 5-year fixed rates for as low as 1.74 percent! If you’re the type of buyer/investor who prefers consistency and the certainty in knowing exactly what what your mortgage payment will look like over the next five years, then by all means nestle into the comforts of a fixed rate. But it will be important to act now, because while slowing growing, a strengthening economy all but guarantees higher returns on Canadian bonds which results in higher fixed mortgage rates. In fact, that is indeed the theme of this midsummer mortgage dream – the time to make your move is now. Wait much longer and you may miss the boat.
Unsure about which rate and/or lender is best suited to your tastes, needs, and goals? Want to get access to even better, unadvertised, variable or fixed mortgage rates? Want to learn more about other home financing options? Contact Carloni Mortgage Brokers at 250.493.9111 to get the ball rolling with a friendly conversation. And don’t forget to subscribe to the Carloni Report and this blog to stay on top of opportunities. What an exciting time to be a buyer!
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