Penticton Mortgage Rates Update – June 2021
The spring season is winding down. This not only coincides with summer vacation planning, but with the Bank of Canada’s latest announcement on economic affairs and their impact on borrowing rates. This is of significant interest to those who anticipate buying a home in the summer months. Should you move forward with your plans or hold-off in light of recent news? Let’s find out!
What BC Southern Interior Buyers Need to Know About the Pre-Summer 2021 Bank of Canada Announcement Regarding Borrowing Rates
Bank of Canada Policy Rate Maintains at .25%
As we predicted in the early spring, the Bank of Canada is not expected to increase their policy rate anytime soon. They are committing to the current .25%. until their inflation objective of 2% is sustainably achieved.
While it’s true that we are currently experiencing a period of steady growth (national GDP is up 5.6%) there is still some work to do. Employment levels remain much lower than they were before the government enforced lockdowns of early 2020. In addition, economic growth is specific to certain regions. Provinces that have experienced a larger second or third wave of the pandemic had to scale back economic momentum in many sectors. While the BC Southern Interior is seeing a very significant and sustainable decrease (almost out of the woods!) in COVID case-counts it was just 8-weeks ago that the region logged its highest numbers since it all began. While the end of the health crisis (and government reaction to it) is now a near-certainty, economic stimulus to bolster consumer spending remains imperative to our return to glory. As a result, the policy rate will maintain at .25% through the summer. This serves those who prefer variable mortgage rates, as they are directly tied to the Bank of Canada’s policy rate.
Simply put, when it comes to variable mortgage rates, this summer is a GREAT time to buy. Call 250.493.9111 to get the ball rolling!
Fixed Rates Will Remain Low for the Next Few Weeks
What about fixed mortgage rates? Will they remain at historically low levels through the summer of 2021? The Bank of Canada announcement didn’t dig too deep into the details regarding bond purchases (which impact fixed mortgage rates). That said, they stated that decisions regarding adjustments to the net bond purchases pace will be guided by the Governing Council’s ongoing assessment of the strength and durability of Canada’s economic recovery. Read between the lines to note that for fixed rates, things will stay as is for the next few weeks, if not the entire run of summer.
That’s good news for current buyers.
Again, the 5-year fixed rate being offered in the BC Interior is still historically low. If lenders do try to recoup 2020-21 losses over the summer, the rate increases will be negligible. This is further validated by the fact that the Bank of Canada announced that they will continue with the quantitative easing program (QE). If you’re unfamiliar with the QE program you can reference our previous article on the economic concept. To summarize, the program essentially helps keep fixed mortgage rates lower than they otherwise would be during a period of economic growth. So yes, in addition to low variable rates, fixed rate hunters should also be excited to enter the market this season.
Want to enjoy even better, unadvertised, variable or fixed mortgage rates? Want access to home financing options that you didn’t know you had? Get pre-approved to lock in your rates today, or discuss many other options by contacting Carloni Mortgage Brokers at 250.493.9111 today. And don’t forget to subscribe to the Carloni Report to stay on top of opportunities. It’s truly an exciting time for buyers and investors alike!