Penticton Mortgage Rates Update – March 2022
Remember in our most recent Penticton real estate news update, when we encouraged buyers to act quickly before market forces increased the cost of buying a home? We named high demand for BC Southern Interior properties and a subsequently tightening inventory as key drivers of more costly mortgages. The other? The Bank and Canada’s overnight rate. We predicted that the Bank would raise the borrowing rate in 2022, and that prediction came true on March 2 when they made their scheduled announcement. The rate moved from .25% to .5%. But before you come into our Main Street office to smash our crystal ball, we want you to pause for just a second to put the news in perspective. Please keep reading.
What Buyers Really Need to Know About the March 2022 Bank of Canada Increase in the Prime Interest Rate
Media is Overhyping the Overnight Rate Increase
You see, local and national news has blown the increase way out of proportion. We know, it’s shocking that the media could be capable of such a thing. They jumped all over the announcement, stating that a move from .25 percent to .5 percent denotes a 100% increase in the overnight rate. But what does that really mean for new buyers and investors? Almost nothing, and you don’t even need to read between the lines in this case. Instead of taking our word for it, let’s have a look at the official chart for the Bank of Canada prime/overnight rate over a period of nearly 80 years:
See what 2022 looks like compared to the entire history of the Bank of Canada (incorporated 1935)? The current lift is so negligible that it barely registers when you look at the near 90-year trend.
Let’s zoom in with a closer look at the overnight rate since 2008 (compared against inflation):
Was there an increase? Of course. But the graphics speak for themselves. The media doesn’t report on the fact that the March Bank of Canada rate increase will have very little impact on the cost of getting a mortgage. This is especially true when you work with a mortgage broker who has longstanding ties to lenders in the BC Southern Interior. The right broker will get you access to lower unadvertised mortgage rates, and will also connect qualified individuals and households to first time buyers incentive programs which reduce downpayment requirements and can lower the overall cost of getting a mortgage.
All is Well, But Still…Act Now
All is well buyers. In fact, it’s great. That said, our aforementioned crystal ball does not lie. The Bank of Canada will likely continue to increase the overnight rate in the months to come as the economy returns to “normal”. And until new residential construction projects are completed, inventory will get leaner. The latter will increase the value of currently available homes. Subsequently, our own Penticton mortgage rate announcement is clear – act now. Get pre-approved on a mortgage and contact Carloni Mortgage Brokers today to get the ball rolling.