Market Update - February 2019
It has just been said by Stephen Poloz, head of the Bank of Canada
(BoC) that an increase of the benchmark rate is “highly uncertain”. In
spite of the fact that our economy is still going strong and that we
have had a higher-than-expected employment growth in January, BoC
is signaling that they are unlikely to increase the overnight interest
rate in the near future due to the already slowed real estate markets
across the country and the great uncertainty of our international
trade. The next rate announcement by BoC is scheduled for March
6th. Most economists predict the rate will remain the same.
Overall mortgage rates are coming down across the board for both
fixed and variable rate terms. We are entering the beginning of the
busy housing season and lenders are competing against each other to
gain new business. However, if BoC continues to keep their overnight
rate as it is for a while, we are likely to see mortgage lenders start to
offer less discount off the Prime Rate for their variable rate products.
If you are a fan of variable term, this is the time for you to review
your existing mortgage and consider the option of switching to a
better discounted term before all these deeply discounted offers go
away. Often, we see the savings from the better discounted terms
greatly exceed the penalty charged on breaking the old terms. Please
feel free to contact us if you would like us to analyze your existing
financing plan and develop a good saving strategy for you.
We also would like to remind homeowners of the upcoming
controversial speculation and vacancy tax. You can find detailed
information and a help line on the BC government’s website. The
deadline is March 31, 2019.
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