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Jackie's Mortgage Insights | February 2024

Are you hoping to buy a home or have a mortgage renewal between now and June? Now's the time to act –  fixed rates are possibly on the rise as early as NEXT WEEK, and securing a rate-hold now for your upcoming renewal or purchase in the next four months could be your key to savings. Don't delay, seize the opportunity today.

The 5 year bond yield has been creeping up the last 6 weeks, on fears of inflation not being tamed yet. If your mortgage is up for renewal between now and June or if you’re hoping to buy a home in the next 4 months, now is an excellent time to secure a rate-hold, because fixed rates might be increasing soon.) 

The Bank of Canada is still very concerned about inflation and will be watching next Tuesday’s Canadian inflation numbers very closely.

There are 8 different buckets that make up inflation. Of those, the shelter component accounts for about 30% of inflation. Shelter includes mortgage payments and rent payments.

Economists are hopeful that the inflation numbers next week will be favourable due to base effects. "Base effects" refers to how economic values from a year ago affect the rate of change in economic data today.  The BoC has to perform a delicate balancing act because if they hint that rate hikes are done, then buyer’s expectations are that rates will be decreasing soon.  This will in turn cause buyers to flock into the market, which will create competition and then drive purchase prices higher. In turn, the shelter cost will increase which will then drive inflation higher. On the other hand, if the BoC doesn’t decrease their overnight rate target, then interest rates will remain higher, causing Canadians’ mortgage and rent payments to stay high, therefore keeping the shelter cost high and in turn, keeping inflation above the Bank’s 2% target.  

The truth is nobody has a crystal ball, so your best bet is to consult with me and I will strategize with you and help you assess the best route for you financially.

Jackie Zerbe | | 604.724.6982

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