Bank of Canada Hiked Rate - AGAIN You’ve likely already seen in the news, heard by the watercooler, or flipped through on social media that The Bank of Canada has increased the overnight rate for the 6th time this year.This year started off quite well with lower rates and a very robust market, it has been slowly changing to a doom and gloom prognosis from many a banker and Economist. It has become ever apparent in many places that our economy is being affected by inflation and the Governments response to it has been firm – slow the economy to slow today to make way for a better tomorrow. We are seeing it at the pumps, in the grocery store and even our credit card bills are seeing a higher cost to carry balances.Depending on which Government sect you follow, inflation is either a necessary thing or a result of poorly managed money by the Government itself. I don’t pretend to know the answer to this question – of course, I have my opinions though, just like you. For those who own their homes, like you and me, we have already seen an increase in our payments a couple of times if you’re on an Adjustable Rate mortgage, and if you’re on a Variable Rate mortgage with a Fixed payment, you may be wondering, when will my payment change with these announcements? This is likely going to happen very soon as Trigger rates are being reported by many lenders. Your adjustable and/or variable rate mortgage, line of credit and/or student loans are all based on the Prime Rate; here is your personal update from me on the recent Bank of Canada announcement. News for you. As of October 26th, 2022 at 10:00 AM, the Bank of Canada has Increased their Overnight Rate to 3.75%, up from 3.25% as it was yesterday.   We have all been made aware of the startling events that are leading us into this current environment and it is starting to take its toll on many a consumer. Now is not the time to panic or hide in a corner until things improve – NOW is the time to review your situation and determine your position for the next couple of years or if you need to make some changes to withstand these forces.   Here is a snippet of the Bank of Canada’s reasoning for the hike: “In the last three months, CPI inflation has declined from 8.1% to 6.9%, primarily due to a fall in gasoline prices. However, price pressures remain broadly based, with two-thirds of CPI components increasing more than 5% over the past year. The banks preferred measures of core inflation or not yet showing meaningful evidence that underlying price pressures are easing”.   This is certainly not the full story but know that the Bank of Canada is looking at our Economy in Canada and Globally and at what has and continues to impact us even more. Making the decisions and adjustments accordingly, this hike is not to “punish” anyone or to take the homebuying power away from anyone, but more to slow the economy to more sustainable levels. Here is a link to the Full announcement for those who are interested in reading more about the decision.<a href="https://www.bankofcanada.ca/2022/10/fad-press-release-2022-10-26/">https://www.bankofcanada.ca/2022/10/fad-press-release-2022-10-26/</a>A prediction in our industry is that interest rates will raise in December as well – by either the same amount or a slightly lower margin and then level off at the end of the year as the government continues to find ways to restore the balance in the economic outlook.What does this mean to you?To oversimplify it, for every $100,000 in the mortgage, there will be an “approximate” increase in payment per month of $29.36, so $58.71 for a $200k mortgage, $88.06 for a $300k mortgage etc. Of course your actual balance, lender, term and amortization will vary. This is why it’s a good idea to chat about your situation and respond to this announcement as quickly as you can to mitigate the overall impact this has on your situation. Next StepsNow is the time to have a conversation about your situation and see where things are headed and what is the best course of action for you to take given your situation.Please reach out for a Consult to review your scenario and what your options might be. Also, feel free to pass this information on to your friends, family and co-workers. Let's start planning as soon as we can and even get approval on the books for you.Whatever the situation, I am here to help please feel free to reach out or pass along my contact information. I’ll be in touch again for the final announcement of 2022 on December 7th. Iris Dowling, Mortgage Broker<img src="https://ci5.googleusercontent.com/proxy/83xPrc7DqmSYDDyNPjksL2k50mVz5wxGFEIZaHyyL5spsuXAlgAQeiXf-V8wgrASjm0hXUlUD3tWm1XpccwWveOCKDIagjSo01H_V5lR1C_Upy4wl227qPV1iogKPtPg01Rn6zoP-7hPVjGgOk3bftaT6XVFctY2-DX3OrJhg0F2N50S1t7jAt75AFZpNWiq3mNqBTlJNzeW3g1aag=s0-d-e1-ft#https://moregidge-email-marketing.s3.amazonaws.com/production/images/c379ced2-1a4a-44ba-8596-46255f4fc0f8/Iris%20Zoom%20Resolution010.jpg"><a href="https://v6t0btl3.r.us-east-1.awstrack.me/L0/https:%2F%2Fmoregidge-email-marketing.s3.amazonaws.com%2Fproduction%2Fimages%2Fc379ced2-1a4a-44ba-8596-46255f4fc0f8%2Fmacc.jpg/1/010001841ee83bc4-f14881ef-f91d-465a-a9fc-51c66a08c50f-000000/FG4wUbgQg53pq0aqSD1bpJSDXKM=293"><img src="https://ci5.googleusercontent.com/proxy/OVkURAIJ4-wSN5z7i_353tzXq24A8c6c8WhLCzmi6sIca969kvFEp07iEysUsjZK5Jh0fUzr8F3VQshvUOKYIhcGS0UClXlpXmicnjxyyYI1S9ODV2XcUcmKxReNGfGtvQib53pn6Lj329AgqjrqDeLIy9JCogmyP9EKGpnqnM_8a0Pi2Q=s0-d-e1-ft#https://moregidge-email-marketing.s3.amazonaws.com/production/images/c379ced2-1a4a-44ba-8596-46255f4fc0f8/macc.jpg"></a>Iris Dowling,Mortgage Broker416 567 9915<a href="mailto:mortgagesbyiris@gmail.com">mortgagesbyiris@gmail.com</a>in partnership with Mortgage Alliance lic #10530

BOC Interest Rate Hike | What does it mean for you?

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