2024 Interest Rate

Latest News Arman Sandhu 26 Jan

Economists predict cuts later in 2024, but could be higher than pre-pandemic

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Tiff Macklem is leaving the Bank of Canada’s influential interest rate at 5% for the time being. (Adrian Wyld/The Canadian Press)

The Bank of Canada has announced its key overnight interest rate will remain at five per cent, keeping its benchmark the same for the fourth time in a row.

Today’s announcement was predicted by many economists. The central bank last raised interest rates in July 2023.

At a press conference on Wednesday morning, the central bank’s governor, Tiff Macklem, said discussions at the Bank of Canada are now shifting from how high to how long.

Instead of looking primarily at whether the bank’s policy-setting interest rate is high enough, the bank is now considering how long its “current restrictive stance” of a higher interest rate needs to be in place.

Inflation ‘still too high’: Macklem

Despite that potential shift in message, the bank is not saying interest rates will be falling soon, given continued concern about inflation.

In a prepared speech, Macklem pointed out that inflation has been falling over the past few months as increased interest rates driven by the Bank of Canada have helped slow the economy.

But “inflation is still too high,” he said, pointing out that there are still inflationary pressures. The governor told reporters it’s “premature” to be discussing a cut to interest rates.

While Macklem said the bank has not ruled out further rate increases if inflation rises, he also said that if the economy “evolves broadly in line” with current projections, he does not expect an interest rate hike to be discussed.

The predictions of most economists came true on Wednesday as the Bank of Canada kept its trendsetting overnight interest rate at five per cent. (Adrian Wyld/The Canadian Press)

“I expect future discussions will be about how long we maintain the policy rate at five per cent,” he said.

The inflation rate in Canada declined for much of the last year, but moved upward in December. The Bank of Canada’s forecasts expect inflation to reach its targets of around two per cent by 2025.

As for economic growth, by some measures it had begun to stall and slow down at the end of last year.

“We don’t think we need a deep recession to get inflation back to target. But we do need this period of weak growth,” said Macklem told reporters on Wednesday.

Rate cuts to come, say economists

Economists from both CIBC and the Bank of Montreal reacted to today’s announcement by predicting a cut to the interest rate in June 2024, with BMO saying “rate hikes over the past two years are doing their job.” ………..

Full Article: No change on interest rate as Bank of Canada sticks to 5% | CBC News

Reporter: Anis Heydari

CBC NEWS

Arman Sandhu

 

Mortgage Types 101

Mortgage Tips Arman Sandhu 22 Jan

Get to know the important basics before you choose your mortgage.

You have to be sure you select what is most important to you – lower rates or flexibility. Before you choose a mortgage, take some time to study mortgage types:

Closed Mortgage: If you want consistency with respect to rates and the length of your mortgage agreement, a closed mortgage is best for you. Interest rates are typically lower (and do not change with the length of the term). However, a closed mortgage does not offer much flexibility in paying off your mortgage sooner – with the exception of a once-a-year lump sum payment up to 20% of your entire mortgage.

  • Predictability and consistency with respect to payment amount
  • Often comes with lower interest rates
  • Limited flexibility with paying down the mortgage faster
  • Cannot change interest rate during the term of mortgage

Convertible Mortgage: Want the best of both worlds? Then consider a convertible mortgage. Convertible mortgages are flexible yet offer minimal risk. Often with a lower interest rate than an open mortgage, convertible mortgages provide the opportunity to switch to a longer-term closed mortgage without penalty.

  • Provides an opportunity to take advantage of lower interest rates and switch to a closed rate without penalty
  • Offers lower interest rates than an open mortgage

Open Mortgage: If you are looking for flexibility with regard to paying off your mortgage, consider an open mortgage. No penalty is incurred if you decide to make lump sump payments or pay off your mortgage before the term expires; however, this flexibility comes often with a higher interest rate – which can result in higher monthly payments.

  • Maximum flexibility; no penalty for making lump sum payments or paying off your entire mortgage before the term expires
  • Higher interest rate
  • Best for those looking to pay off their mortgage as soon as possible

Still not sure which type of mortgage is best for you? Contact a DLC Mortgage Expert today!

 

Published by DLC Marketing Team

Arman Sandhu

Pantone of the Year

General Arman Sandhu 15 Jan

As we enter the New Year, it’s always fun to reflect on the previous twelve months and take a look at what is trending as we move forward.

If you’re unfamiliar with the Pantone of the Year, it is more than just a colour to paint your walls. Since 2000, the Pantone Colour Institute has been indicating a colour of the year and, for many, this is seen as a representation of the current moment in time helping us to reflect on the culture and state of the world. Think of it like a snapshot in time!

For 2024, the Pantone color of the year is “Peach Fuzz”; which is notably a warm and cozy hue to feed and nourish the soul.

During this post-pandemic period of turmoil around the economy, mortgage industry, and housing market, many of us are currently in need of more nurturing and comfort. This colour signifies the importance of caring and community even more as we enter 2024.

As the calendar turns over, take inspiration from Pantone to make the New Year one of comfort, healing and peace for yourself and those around you. With interest rates forecasted to drop towards the later half of 2024, housing and job markets set to stabilize and inflation slowly reducing to normal, we have some stability to look forward to.

To ensure you can make 2024 as comfortable as possible, don’t hesitate to reach out to a DLC Mortgage Expert for advice. Managing your finances can be a great way to reduce stress and leave time for more important things! Renewals are on the rise, and this can be a great opportunity for you to rebalance your mortgage contract, review your interest rate and terms, and update your payment schedule to make the most of your monthly cashflow.

Published by DLC Marketing Team

Arman Sandhu

Mortgage Renewal Benefits

Mortgage Tips Arman Sandhu 5 Jan

Get a Better Rate

Are you aware that when you receive notice that your mortgage is coming up for renewal, this is the best time to shop around for a more favorable interest rate? At renewal time, it is easy to shop around or switch lenders for a preferable interest rate as it doesn’t break your mortgage. With interest rates expected to come down as we move into the New Year, taking some time to reach out to me and shopping the market could help save you money!

Consolidate Debt

Renewal time is also a great time to take a look at your existing debt and determine whether or not you want to consolidate it onto your mortgage. For some, this means consolidating your holiday credit card debt into your mortgage, for others it could be car loans, education, etc. Regardless of the type of debt, consolidating into your mortgage allows for one easy payment instead of juggling multiple loans. Plus, in most cases, the interest rate on your mortgage is less than you would be charged with credit card companies.

Start on that Reno

Do you have projects around the house you’ve been dying to get started on? Renewal time is a great opportunity for you to look at utilizing some of your home equity to help with home renovations so you can finally have that dream kitchen, updated bathroom, OR you can even utilize it to purchase a vacation property!

Change Your Mortgage Product

Are you not happy with your existing mortgage product? Perhaps you’re finding that your variable-rate or adjustable-rate mortgages are fluctuating too much and you want to lock in! Alternatively, maybe you want to switch to variable as interest rates start to level out. You can also utilize your renewal time to take advantage of a different payment or amortization schedule to help pay off your mortgage faster!

Change Your Lender

Not happy with your current lender? Perhaps a different bank has a lower rate or a mortgage product with terms that better suit your needs. A mortgage renewal is a great time to switch to a different bank or credit union to ensure that you are getting the value you want out of your mortgage if you are finding that your needs are not currently being met.

Regardless of how you feel about your current mortgage and what changes you may want to make, if your mortgage is coming up for renewal or is ready for renewal, please don’t hesitate to reach out to a DLC Mortgage Expert today! We’d be happy to discuss your situation and review any changes that would be beneficial for you to reach your goals; from shopping for new rates or utilizing that equity! Plus, we can help you find the best option for where you are at in your life now and help you to ensure future financial success.

Published by DLC Marketing Team.

Arman Sandhu – Mortgage Broker