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your mid-week mortgage market minute
with Jim Cook, Broker
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in the mortgage marketplace ...
Today, the Bank of Canada will make it's next interest rate announcement - and we are all expecting the same thing - no change in rates.  Inflation measures are all trending down.  Consumer Price Index or CPI is down, core CPI is down - and if you strip out mortgage interest costs, which many countries do not include in their inflation calculations, we are right at BoC's target of 2%.

That being said, no one is expecting a rate reduction in this announcement.  Instead a softening in language and a 'we need more time to see evidence that our past actions are having an impact' type theme.

Moving on from rates, a recent ReMax poll indicated that 73% of Canadians think home ownership is the best investment they can make.  A separate Royal LePage survey showed 56% of home hunters paused their purchasing plans due to interest rates - half of those indicated they'll be back in the market when rates take a dip.

Knowing this together with inventories remaining tight, that any government supply fixes will move at a glacial pace and that new Canadians continue to flow into the country, it's highly unlikely that we are going to see much in the way of home price reductions.

That is why I continue to think that this spring may be a 'blink and you'll miss it" kind of market to snag a home at current pricing.

 
rate snapshot ...
We are seeing nominal reductions in some term lengths. Unfortunately, the sweet spot 3 yr term rate hasn't budged.  For properties priced below $1 million, with less than 20% down payment, example rates would be:
  • 1 yr fixed  7.25% or $7.16 per $1k in mortgage
  • 3 yr fixed  5.14% or $5.90 per $1k in mortgage
  • 5 yr fixed  4.99% or $5.81 per $1k in mortgage
For clarity, a $500,000 at 5.09% on a 25 yr amortization would have payments of 500 x 5.87 = $2,935 monthly.

Note also that rates can change daily, certainly differ between lenders and definitely differ based on down payment, mortgage features and hidden costs.
in Jim's practice ...
This is a short email this week as I am still out of country - returning by the weekend.  I can tell we are past February - the inbox is becoming ALOT more active.  It's going to be a busy weekend!

Have a successful week!  
Highly recommend! Very trustworthy, honest and explains everything  :)  
(VC, Jan 2024)
chatwithjim.ca

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Jim Cook is a nationally-recognized broker with some quarter billion in mortgages funded. 
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