3 Minute Read

JUST IN: The Bank of Canada has recently made an important announcement regarding the increase in interest rates. They have decided to raise the prime rate by 25 basis points, bringing it up to 7.20%.

This adjustment in interest rates will have an impact on those with variable-rate mortgages, as they can expect either an increase in their monthly payments or a change in the length of their mortgage amortization period.

It is worth noting that this increase marks a significant milestone, as it is the first time in 22 years that the prime rate has reached this level. Many economists had anticipated this rate hike, especially considering the recent robust job numbers that surpassed expectations.

This is going to put more strain on our market over the summer, in two different ways:

Current buyers who have a locked in interest rate that's lower are now in a pressured spot to purchase a home before their locked in interest rate expires. This could cause a flux of buyers to surge to purchase

Any buyers who don't have a locked in rate now will be able to afford less with a higher payment, meaning the amount of buyers able to afford higher-end homes just decreased. This also puts more stress on anyone looking to renew their mortgages as well.

The next Bank of Canada announcement is scheduled for September 6th, 2023. Rest assured, I'll keep you informed about any further changes or developments at that time.

Looking to buy or sell a home? Let's talk about how I can make your real estate journey a seamless and stress-free one.

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