In an announcement that was greeted with both relief and expectation, the Bank of Canada decided to leave its overnight interest rate at five per cent. Accompanying the news release is a cautionary note that the Bank is prepared to raise the rate further if needed.
The effect of the stability of its "no change" decision, hopefully, will have a positive impact on enabling people to qualify for mortgages. Many have been waiting for interest-rate announcement, specifically if they're interested in variable-rate mortgages.
The B.C. Real Estate Association accompanied the news with this look to the future:
"Yields on five-year Government of Canada bonds have come down from their highs near 4.5 per cent but remain at their highest level in 15 years. Consequently, fixed mortgage rates have hit annual highs over 6 per cent, the impact of which is compounded by an increasingly punishing stress test. We expect five-year fixed mortgage rates may start to come down in early 2024.”
For more on mortgages and interest rates, watch for News From Nexus, the monthly newsletter due to be released during the first week of November.
The next Bank of Canada announcement is scheduled for December 6.