Festival condos menkes. Canada announces interest rate hike! The Bank of Canada raised its benchmark interest rate by 25 percentage points to 0.5% for the first time today March 2 since it cut its benchmark interest rate to an all-time low at the start of the new crown epidemic.Please Visit: Festival condos menkes to Get Your VVIP Registration Today!
And the central bank also warned that interest rates would continue to rise in the future, taking into account the sudden war.
This is the last time Canada has raised interest rates in nearly four years, the last time it was in October 2018, when interest rates were 1.75%.
In March 2020, when the epidemic broke out, the Bank of Canada urgently cut its benchmark interest rate to 0.25% to help Canada withstand the economic impact of the epidemic.
Now that the benchmark interest rate has risen, perhaps what people are most concerned about is the impact of the increase in interest rates on the Canadian housing market, especially for homeowners with floating rate mortgages.
So will higher interest rates cool the Canadian housing market?
“the initial impact on the housing market will not be significant,” said Robert Hogg, a senior economist at Royal Bank of Canada. ”
But he believes that the impact of benchmark interest rates on the housing market will only slowly become apparent after several interest rate increases this year. According to Hogg’s forecast, the Bank of Canada could raise interest rates as many as four times this year, each by 25 points. Interest rates are expected to return to 1.75% by the second half of 2023.
As interest rates rise, so will the stress tests before home buyers take out loans. It is believed that some buyers may choose to wait and see.
On the other hand, the biggest impact of the increase in benchmark interest rates is on home loans. About 1/3 of mortgages renewed in the past three years are floating rate loans, according to a consumer report released by Canadian mortgage professionals (Mortgage Professionals Canada). In the past two years, the proportion of floating interest rates has risen to about half.
Homeowners with floating-rate loans should pay attention. When the central bank’s benchmark interest rate rises, banks will adjust their prime rate, which in turn affects the floating rate, and interest rates will rise in the short term.