The Bank of Canada announced today they will be holding steady with the current policy interest rate. The current overnight rate sits at 4.50%. Variable mortgage holders and those up for renewal are quietly breathing a sigh of relief.

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

From our latest Mortgage Rate Outlook, look for fixed mortgage rates to rise, with variable rates to hold steady. To view the latest mortgage rates updated daily from banks and mortgage brokers, bookmark our rates page.

As of today, variable mortgage rates are higher than fixed mortgage rates. With inflation slowing down, most mortgage lenders, including the big 5 banks, are predicting that rates are likely to go lower within the next 5 years.

Despite the slowing economy, unemployment rates remain low. This economic data is likely leading to delays in the anticipated interest rate cuts from the Bank of Canada. Our long term rate outlook has now reverted back to 4.00% as of our March Morgage 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 1% 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. The long term interest rate outlook has reverted back to 4.00% as of our March outlook and a steadier decline in inflation than initially projected in January has led to a modest rise in fixed mortgage rates.

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

According to CREA's most recent report, Canadian home sales activity in January 2023 was down 3% month-over-month and reached a 14-year low. Meanwhile, the number of newly listed properties rose 3.3% month-over-month compared to December, led by increases across British Columbia, which aligned with our earlier predictions. However, despite the slight bump in listings, inventory remains historically low.

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 as low as it's 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 ‚Äď 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, April 12, 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.

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