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Bank of Canada Announcement (November 2021)

Penticton Mortgage Rates Update – November 2021

Prior to Halloween, the Bank of Canada concluded October with an announcement regarding the prime interest rate. If you’ve been following along on our Penticton mortgage news blog, then you know that the announcements have had little impact on mortgage rates and the real estate market over the last year. But things are a little different now. Economic growth is occurring, and while some uncertainty remains, it’s clear that far brighter days are ahead for 2022. So what’s new from the Bank of Canada that may (or may not) impact your decision to buy a home before the ball drops on 2021? Let’s find out.

What BC Southern Interior Buyers Need to Know About the November 2021 Bank of Canada Announcement Regarding Borrowing Rates

Prime Rate Doesn’t Budge – Variable Mortgage Rates Still Great

As expected, the Bank of Canada announced that the overnight rate will maintain at .25%. Throughout 2021 they stated that they would keep it as such until economic goals are achieved, which is not anticipated to occur until late in 2022, if not 2023.

What does this mean for buyers who prefer a variable mortgage rate? It’s nothing but great news. Variable rates have been at, or near, record lows all year and they will continue to be so. This is because the Bank of Canada prime rate has a direct impact on variable rates.

Let’s look at a few currently available (as of November 4) variable mortgage rates for reference. RBC is advertising their 5-year variable rate at 1.68%. BMO is offering a special variable rate at 1.65%, and TD is dipping as low as 1.55% (restrictions apply). That said, if you are buying a property in Penticton or elsewhere in the Okanagan Valley your opportunity is even better. By partnering with Carloni Mortgage Brokers, you may get access to even lower unadvertised rates. Contact us today at 250.493.9111 to get access to these special variable mortgage rates and increase your buying power.

Quantitive Easing Program is Done – Will Fixed Rates Get Higher?

This is the difference-maker from all other Bank of Canada prime rate announcements from 2021. They are finally easing off of the Quantitive Easing Program. If you recall from prior discussions on our blog, the Quantitive Easing Program is a Bank of Canada initiative that exists to keep fixed mortgage rates from rising during periods of economic growth. Why would they do this? Because if fixed rates rise too fast during economic growth, a reverse effect may occur. Consumers will stop spending on big purchases (homes, automobiles, etc.) that they need to borrow funds for. But with jobs coming back in full force and the unemployment rate seeing a near 2% boost from 2020 (for obvious reasons) the Bank is confident that they don’t need to lean on the QE program any longer. At least not in the near future.

While bolstered economic confidence seems like great news on the surface, the Bank’s reduced activity on the bond market does have a converse impact on fixed mortgage rates. When the Bank of Canada stops buying up bonds (read: halts the QE program) fixed mortgage rates tend to rise. In fact, lenders saw this coming. We reported on a small increase in fixed mortgage rates from key lenders last month in our Penticton real estate news update.

Will fixed rates continue to tick upwards? They may, but take that with a grain of sugar. At press, both BMO and CIBC’s currently advertising a high-ratio 5-year fixed rate as low as 2.62%. ScotiaBank is marketing their Scotia Flex Value Mortgage – 5 Year Closed Term at 2.65%. While higher than the highly enjoyable 2% and under mark from the spring and summer of this annum, these rates are still low compared to what we found prior to economic lockdowns. Still, you need to connect to a mortgage broker more than ever. The right broker has access to lower unadvertised fixed rates, and can help you capitalize on a first time buyer incentive program that is best suited to you. Contact Carloni Mortgage Brokers today at 250.493.91111 to get access to these special fixed mortgage rates and to learn more about incentive programs available to BC buyers.

Stay tuned for more as the Bank of Canada delivers their next announcement before year end.

Call 250.493.9111