Bank of Canada Mortgage Rate Announcement - November 2021
November 3, 2021 | Posted by: Ron Chan
At the end of October the Bank of Canada (BoC) made their scheduled announcement regarding the prime rate. If you've been following our Winnipeg mortgage and real estate blog then you're probably thinking - same old, same old, right? In some ways, yes. But for the first time in a long time the BoC has made a move that may more directly impact mortgage rates. Do you plan on buying a home before the end of 2021, or are you considering waiting until the beginning of 2022? Here's what you should know.
What Home Buyers Need to Know About the November 2021 Bank of Canada Announcement Regarding Lending Rates
Prime Rate Maintains = Low Variable Mortgage Rates
First, let's take a look at what we have all expected to occur. The BoC is not budging on the prime interest rate. They have been stating all year long (and then some) that they will not change it at all in 2021, and they have stayed true to this stance. As a result, variable mortgage rates remain extremely low and are especially favorable to new buyers. At press, RBC has advertised their 5-year variable rate at 1.68%, TD is offering a special variable rate at 1.55%, and CIBC is marketing theirs at 1.65%. You get the idea. Of course, if you are looking for a home in Winnipeg and partner with a longstanding mortgage broker, you may get access to even lower unadvertised rates. Contact Ron Chan today at 204.290.9950 to get access to these special variable mortgage rates.
Ends Quantitive Easing Program = Higher Fixed Rates?
The BoC has stated that despite uncertainly in some sectors, Canada has made strong economic gains as we enter the fourth quarter of 2021. At press, nearly 84% of those aged 12 and older are fully vaccinated, and as that number rises so does BoC (and consumer) confidence in economic recovery. In light of the current and further expected progress, the Governing Council has decided to end their quantitative easing program. They will keep its overall holdings of Government of Canada bonds relatively constant. Until now, the quantitative easing program was in place to keep fixed mortgage rates lower than they otherwise would be during a bolstering economic period. Now that it's over, house hunters can reasonably expect a slight increase in fixed mortgage rates. As of November 3/2021, both BMO and CIBC's currently advertised high-ratio 5-year fixed rate special is listed at 2.62%. This is still low compared to what we found prior to economic lockdowns, but it's not at the rock bottom levels of spring 2021, where fixed rates dropped below the 2% mark. As a result, you need to work with a mortgage broker more than ever, to gain access to lower unadvertised rates, and to capitalize on a first time buyer incentive program. Contact Ron Chan today at 204.290.9950 to get access to these special fixed mortgage rates and to learn more about incentive programs.
Stay tuned for more as the Bank of Canada delivers their next announcement before year end.