On March 6th, the Bank of Canada shared some good news for homeowners and those considering buying a home soon: interest rates will remain unchanged. This decision keeps the overnight rate at a steady 5.00%. This move was anticipated in our latest interest rate forecast, owing to signs of slowing inflation and a softer economy.
Here’s what you need to know:
- The Bank of Canada’s decision means the policy interest rate stays at 5.00% for now.
- Mark your calendars for the next update on this topic, scheduled for April 10, 2024.
- Perch’s analysis for March suggests that fixed mortgage rates are likely to decrease, while variable rates should stay the same.
- For personalized advice on how this might affect your mortgage or if you’re planning a renewal, chatting with an experienced mortgage advisor is a smart move.
Why has the Bank of Canada decided to keep rates steady? According to Alex Leduc, CEO and Principal Mortgage Broker at Perch, this latest decision is a reflection of positive trends in inflation, which is moving in the right direction without needing further adjustments from the Bank.
Although the market is looking forward to potential rate reductions starting in the second quarter of 2024, March stands as a crucial point in this journey, indicating the expected beginning of rate cuts in the latter half of the year.
These adjustments are predicted to occur at a pace of about 0.25% per quarter, leading to a total reduction of 2% by the end of 2026. Recent stubbornness in inflation rates has moderated earlier expectations for rate cuts.
Source: The Bank of Canada holds interest rates steady on March 6, 2024 – Perch (myperch.io)
Canada Housing Market 
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