On Wednesday January 24th at their regular policy meeting, the Bank of Canada (BoC) again decided to keep their Policy Rate at 5 per cent. This means that lenders will hold their consumer Prime Rate steady at 7.20 per cent and there will be no changes to the payment amounts for variable rate mortgages or Lines of Credit.
This is the fourth time in the row now that the BoC has left the policy rate unchanged.
In the context for its decision, the BoC referenced the meager and declining economic growth across most national economies, and lower oil prices (down $10 per barrel compared to what they expepcted back in October). These factors will continue to help inflation ease globally.
Within Canada itself, the BoC acknowledged that our economy “has stalled since the middle of 2023 and growth will likely remain close to zero through the first quarter of 2024.” With both consumers and businesses spending less on goods and services, supply now exceeds demand and that should continue to drive down inflation.
Overall, the language used by the BoC in this most recent announcement is more moderate than before, and is further support for our prediction that we are at the top of the rate cycle and should expect to see the BoC make a few small and gradual rate cuts over the second half of 2024 in an effort to forestall a major recession.
If you know anyone whose mortgage is renewing in the next 6-12 months, please encourage them to get in touch with us to discuss the best strategy for their goals. Since we’re at the peak of such a substantial rate increase cycle, it’s important to plan ahead in order to take advantage of the lower rates that will likely be available in 2025 and 2026.
We are always happy to discuss your financing needs!
Please book an appointment today with one of our broker team to discuss your plans and we’ll make sure you have all the information you need to make the best financial decision and get the best mortgage to reach your goals.
You can find our best mortgage rates here.
Also, it’s always a good idea to stay informed about any changes to the Prime Rate to understand how it may affect your payments and mortgage renewals. If you aren’t already subscribed, you can sign up to our newsletter for updates directly to your inbox.