Penticton Mortgage Rates Update – Autumn 2022
Last week (October 26) the Bank of Canada (BoC) made another one of their interest rate announcements. Eyes rolled across the BC Southern Interior as prospective home buyers wondered what the news would bring. Will the BoC’s words cause Okanagan and Penticton mortgage rates to rise yet again? Or will things even out as we wind down the annum? In order to adequately answer your questions and concerns we’ve waited a week longer than we normally would to report on the announcement. It’s a good idea to let the dust settle to find out how the Bank’s meddling may or may not impact homeownership aspirations. So where does your purchasing power now stand as we enter the second week of November? Let’s review.
What Buyers Really Need to Know About the Autumn 2022 Bank of Canada Policy Rate Hike
Interest Rate Hiked by 50 Basis Points
After a series of substantial interest rate increases the BoC’s October 26th announcement of a 50 basis points (.5) hike is actually lower than what many experts anticipated. Nearly everyone was certain of another .75 bump in the overnight rate. So while any increase indicates a continued need to curb inflation, it being lower than expected is a sign that 2023 may enjoy a plateau in the cost of borrowing – and subsequently the same for variable mortgage rates.
What will it take to bring the rates down?
At press, Canada’s economy continues to operate in excess demand as supply chains struggle to keep up. That’s why prices for everything seem to be on the rise – including the cost of residential construction. Furthermore, labour markets are lean – everyone seems to be short staffed – which minimizes production and further strains the supply chain. The Canadian economy is in an odd place at the moment, but the horizon looks much brighter for 2023. Over the last quarter, consumer price index (CPI) inflation has declined from 8.1% to 6.9%. Moreover, the BoC indicates that they expect inflation to ease further as higher interest rates assist in rebalancing demand and supply. This pattern is further spurred as global supply disruptions ease, and the prior outcomes of high commodity prices fade away. Ultimately the cost of borrowing should fall soon enough.
So does the above mean that you should wait to get a mortgage? Not necessarily.
Endemically, buying a home before the end of the year is often ideal. Sellers are desperate to unload and are willing to give in on concessions regarding closing fees and more. In addiction, lenders have year-end fiscal goals to make. As a result, they too are more willing to cave on terms. However, these lenders aren’t advertising this fact. Mortgage brokers on the other hand, are privy to this information. Due to relationships they have with these lenders, we are able to access lower than marketed year-end rates. To be the beneficiary, buyers are advised to partner with a broker before the final quarter of 2022 comes to a close. If buying a home in the BC Southern Interior, contact 250.493.9111 to find out which low variable (or fixed) rates you qualify for as lenders scramble to meet expectations.
Next Scheduled Bank of Canada Announcement
There’s one more Bank of Canada interest rate announcement (and mortgage rate fallout) to come for what’s left of the year. The eighth and final scheduled date of the press release regarding the Bank’s decision for the overnight rate target (and explanation of the factors influencing the decision) is landing on December 7th at 7 AM Pacific Standard Time. Don’t worry, you won’t have to wake up early for the live release. We’ll update you right here with the news. You can also subscribe to our Monthly Newsletter to receive the update (and juicier info) in your email inbox.
If you want to learn more about how current rates impact your plans to buy a home this autumn/winter, or you have any other questions, simply give us a call.