The Bank of Canada announced on April 12 they will be continuing to hold interest rates steady. The current overnight rate sits at 4.50%.

The Bank of Canada announced they will be continuing their pause on rate hikes for the near future while they look closely at the economy to determine future policy.

How will the latest Bank of Canada interest rate announcement affect mortgage rates?

From our latest Mortgage Rate Outlook, we predict that fixed mortgage rates will lower while variable rates remain. To view the latest mortgage rates updated daily from banks and mortgage brokers, bookmark our rates page.

Key Takeaways

  • Bank of Canada has paused rate hikes for the time being, with the next announcement coming in June.
  • We predict fixed rates will lower in April, with variable rates remaining steady.
  • Today’s best mortgage rates are 4.40% for 5-year fixed and 5.65% on 5-year variable

As of today, variable mortgage rates are higher than fixed mortgage rates. With inflation showing signs of returning to normal, mortgage lenders including the banks, are pricing in that rates are likely to go lower within the next 5 years.

Despite a looming risk of recession the unemployment rate in Canada remains low. This economic data is likely leading to delays in the anticipated interest rate cuts from the Bank of Canada as high rates of employment are considered a driver of inflation. Our long term rate outlook has lowered to 3.00% as of our April Mortgage Rate Outlook. In the chart below, you can see how our 5-year variable rate forecast has changed over time based on the Bank of Canada interest rate announcements.

Our analysts predict that prime rates have hit their ceiling and are expected to remain around their current level until the end of 2023. The Bank of Canada is anticipated to cut rates by 2% over 2024 and another 1% over 2025. Adjustable rate mortgage holders will see lower payments.

In February, we saw optimistic economic data that have delayed the pace of anticipated rate cuts from the Bank of Canada.

How will the latest Bank of Canada interest rate announcement affect home prices?

2022 saw declines in home prices across the board in Canada, bringing prices closer to their pre-pandemic levels in some cities. With rate hikes paused for the time being and an eventual policy reversal on the horizon, the market might not stay low for long. If rates start to come back down, it's likely prices will quickly rebound to their prior highs and beyond.

“The similarities between 2023 and the recovery year of 2019 continued to emerge in February, with sales up, the market tightening, and month-over-month price declines getting smaller,” said Shaun Cathcart, CREA’s Senior Economist. We expect the coming months to be more active as buyers enter the market with lesser resale inventory on the horizon.

Buyers are coming back and the real estate market is seeing more activity following expectations that rates will hold steady for the short term. We believe that property prices have hit their bottom and we'll see flatlining for the next quarter and increases in property prices in the second half of 2023 and into 2024

Borrowers won't see lower rates for at least 1 year, but the property prices you see today are likely as low as they're going to go. The next few months will be a very opportune time to buy and anyone on the sidelines should seriously consider executing now before the window of opportunity closes.

Where will mortgage rates be in 2024?

According to financial models by Alex Leduc, Principal Broker at Perch, 5-year variable mortgage rates should start dropping in early 2024.

Will mortgage rates go up in the next 5 years?

Based on our latest Mortgage Rate Outlook, expect 5-year variable mortgage rates to start dropping in 2024 and continue doing so into 2025. We'll be updating our mortgage rate forecast after every Bank of Canada interest rate announcement – you can subscribe to our mortgage rate forecast for free.

What is the Bank of Canada interest rate today?

The current Bank of Canada interest rate sits at 4.50%, with a 0.25% rate hike announced on January 25, 2023.

When is the next Bank of Canada interest rate announcement?

The next scheduled Bank of Canada interest rate announcement is Wednesday, June 7, 2023 at 10:00 AM ET.

What are the remaining interest rate announcement dates in 2023?

There are a total of 8 Bank of Canada interest rate announcements each year. The remaining dates are as follows:

  • Wednesday, April 12, 2023
  • Wednesday, June 7, 2023
  • Wednesday, July 12, 2023
  • Wednesday, September 6, 2023
  • Wednesday, October 25, 2023
  • Wednesday, December 6, 2023

The Bank of Canada typically makes their interest announcement at 10:00 AM Eastern Time.

Here's what else we're reading:

How bond rates impact the mortgage market (3 min read time)

How mortgage insurance impacts your borrowing power (4 min read time)

5 things first-time home buyers should know about getting a mortgage (3 min read time)