The Bank of Canada held its key overnight rate steady at 2.75%. While it’s not the rate cut many were hoping for, it’s a clear signal: we’re nearing a turning point.
Why the hold? - GDP growth is holding up (2.2% in Q1), boosted by a flurry of exports — likely folks racing to beat new U.S. tariffs. - Headline inflation is easing — now 1.7% — but core inflation (the sticky stuff) is still too warm for comfort. - Trade tensions and global uncertainty have the BoC treading carefully. The takeaway? The BoC isn’t ready to cut yet — but we’re getting close. Most economists predict at least two cuts before year-end, possibly starting in July.
What This Means for You:
🏠 Homebuyers: Fixed rates have started to slide thanks to bond market movements. If you’re shopping this summer, your timing might be *chef’s kiss*.
🔁 Renewals: More than half of Canadians will be renewing mortgages in the next 18 months. Today’s hold means we’re likely at the *top* of this rate cycle.
Great news if you're feeling the pressure.
📉 Variable-rate holders: You’re still in wait-and-see mode, but likely not for much longer. A cut could arrive next announcement — stay ready.
💰 Investors: With rates expected to drop later this year, you may want to re-run the numbers on that property that didn’t cash flow last fall.
📞 Lenders factor in all the variables including the anticipated rate drops. Because of that, it is often beneficial to run some numbers ahead of time so you can have a "plan B" or even a "plan c" ready to go. IT's free and there's never a better time to book a call with me than times when the market is catching it's breath like right now. Contact me and let me know the best time for you to chat!
Stuart Lessels
Your “Go To” Mortgage Broker for Georgian Bay and beyond
📞 (705) 445-1234