What to expect from the next Bank of Canada interest rate announcement Canada InterestRate
Laird believes a rate increase is possible next week but unlikely. He says the bank will probably wait for future data to observe whether inflation and economic growth realign with their expectations before it hesitates to hike the rate again."Because a rate hike is now a possibility, fixed rates have already increased. Variable-rate holders who thought that rate hikes were over will be holding their breath to see if their rates are going to go up even further," noted Laird.
"If the Bank does choose to raise rates further, this will put downward pressure on home values and housing activity as spring turns to summer."to assess what would happen to a homeowner who put down a 10 per cent downpayment on a $716,083 home with a five-year variable rate of 5.55 per cent amortized over 25 years. This brings the total mortgage amount to $664,453 .
Laird says that in this case, if the Bank of Canada does go through with a 25-basis point increase in its rate, the homeowner will see their variable mortgage rate go up by 5.80 per cent. The $716,083 home price in this example reflects April's average home price in Canada, as observed by The Canadian Real Estate Association.
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