With all of the economic upheaval in the last 2 months, we have seen the Bank of Canada drop their overnight rate down to 0.25%. It is projected to stay there for the foreseeable future. Any hope of an economic recovery is tied to a potential vaccine and until we have one, we can expect the recovery to be slow.
A slow recovery means a long recessionary period or best case low GDP growth. You can expect the Bank of Canada to leave its rate where it is until 2022.
Meanwhile, the fixed-rate market has started to fall back down to earth. We are seeing rates in the mid-2% range, so some people will be tempted to ditch their variable rate mortgage in favour of a long-term fixed rate. It’s not a terrible idea, but there is currently no rush to lock in. Fixed rates are projected to also stay low during this recovery process. Any strategy that locks in would be better to delay until we start to see fixed rates go up.
Feel free to reach out with any questions that you have about your options, anytime!
If your mortgage term is ending soon, please check-in and we can help you make the most of this renegotiation. The first offer you receive from a lender on renewal is usually the worst offer. It’s worth investigating if you can do better.
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