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5 days ago undefined 1
Canada’s Consumer Price Index for the month of September was released on Wednesday, and this is the indicator of Inflation. We saw headline inflation fall to 6.9%, down very slightly from 7.0% the previous month. Unfortunately, this small drop to inflation will not be enough for the Bank of Canada and it all but assures that they will raise the Prime Rate by at least 0.50% next week when the Bank of Canada meets.
The Bank of Canada has two more meetings scheduled for the remainder of 2022, one on October 26th and the other in December. The newest rumors circulating in the finance world are that we are likely looking at a 0.50% or 0.75% increase next week followed by a 0.25% increase in December and another 0.25% increase in January 2023. This means Canadians should be bracing for at least a 1.00% - 1.25% increase in interest rates over the next 3-4 months. If this were to happen it would put the Bank of Canada Prime rate in the range of 6.45%-6.70%. This will officially be the highest rate I have seen during my real estate career.
Those on variable rate mortgages will see their interest rates right around the 6% mark, some slightly higher, some slightly lower, depending on their discount to Prime. There was a hope out there that we would get an increase next week and then the Bank of Canada would not do anything in December or January and let Canadians try and enjoy the holidays, but with that sticky Inflation print we just saw today, those hopes appear to be fading.
Canada’s Consumer Price Index for the month of September was released on Wednesday, and this is the indicator of Inflation. We saw headline inflation fall to 6.9%, down very slightly from 7.0% the previous month. Unfortunately, this small drop to inflation will not be enough for the Bank of Canada and it all but assures that they will raise the Prime Rate by at least 0.50% next week when the Bank of Canada meets.
The Bank of Canada has two more meetings scheduled for the remainder of 2022, one on October 26th and the other in December. The newest rumors circulating in the finance world are that we are likely looking at a 0.50% or 0.75% increase next week followed by a 0.25% increase in December and another 0.25% increase in January 2023. This means Canadians should be bracing for at least a 1.00% - 1.25% increase in interest rates over the next 3-4 months. If this were to happen it would put the Bank of Canada Prime rate in the range of 6.45%-6.70%. This will officially be the highest rate I have seen during my real estate career.
Those on variable rate mortgages will see their interest rates right around the 6% mark, some slightly higher, some slightly lower, depending on their discount to Prime. There was a hope out there that we would get an increase next week and then the Bank of Canada would not do anything in December or January and let Canadians try and enjoy the holidays, but with that sticky Inflation print we just saw today, those hopes appear to be fading.
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