*Updated* Ongoing Bank of Canada Benchmark Rate Announcements

[MacDaddy77]

kind of joking but not really. If they get to around 4% I'd lock in for sure. There's "posted" 10 year rates out there now around 5.69-5.89% and that's the online posted rate. I'm sure I could get better than posted if I wanted.

[Doctorfever]

Rate cut to 2.75, due to economic uncertainty because of the tariffs.

https://apple.news/AkhRMILOCT_qUDJLC6R2Jxg

The widely expected move lowers the benchmark policy rate to 2.75 per cent. This is the bank’s seventh consecutive cut since it began easing monetary policy last summer as pandemic-era inflation faded.

“We ended 2024 on a solid economic footing. But we’re facing a new crisis,” Governor Tiff Macklem said in a press conference opening statement, according to the prepared text. “Depending on the extent and duration of new US tariffs, the economic impact could be severe. The uncertainty alone is already causing harm.”

[Sylvanfan]

I've seen some reports that the policy rate could come under 2% depending how extreme this trade war gets. That said there will be ramifications on the other side of this as a result of needing to cut to this level without wanting to. I think it's going to be pretty turbulent for some time.

[blankall]

Originally Posted by Sylvanfan

I've seen some reports that the policy rate could come under 2% depending how extreme this trade war gets. That said there will be ramifications on the other side of this as a result of needing to cut to this level without wanting to. I think it's going to be pretty turbulent for some time.

It sounds like Trump has an obsession with getting the value of the US dollar down to make American goods more competitive with Chinese goods. Not having the value of the Canadian dollar fall too far below the American dollar was a major obstacle stopping further rate cuts, which is likely to evaporate now.

[Sylvanfan]

Originally Posted by blankall

It sounds like Trump has an obsession with getting the value of the US dollar down to make American goods more competitive with Chinese goods. Not having the value of the Canadian dollar fall too far below the American dollar was a major obstacle stopping further rate cuts, which is likely to evaporate now.

That was for an integrated system. With an Isolationist U.S. objective all bets are off. The B.O.C. is in a tough place. Inflation is going to smack us pretty hard here...but confidence is pretty light. But if they do lower rates...the richer people who can get these cheap loans will just use it to help themselves.

[blankall]

Originally Posted by Sylvanfan

That was for an integrated system. With an Isolationist U.S. objective all bets are off. The B.O.C. is in a tough place. Inflation is going to smack us pretty hard here...but confidence is pretty light. But if they do lower rates...the richer people who can get these cheap loans will just use it to help themselves.

It's hard to say how the tariffs, and the USA's isolationism in general, will affect us. Yes, it'll be harder to get some goods, but they'll be an excess of goods and raw materials Canada normally exports to the USA. People whose jobs were dependent on the USA may lose their jobs, and Canada could be pushed into a deep recession.

I also don't think it's just rich people taking advantage of loans. In Canada, mortgages comprise a significant portion of debt, and it's typically young people and families entering into those. A system with high inflation and no loans would benefit the rich the most IMO. People who already own capital will see that capital go up in value but wages will remain stagnant.

I don't think the BoC, themselves, know how this is going to play out.

[GGG]

Originally Posted by Sylvanfan

That was for an integrated system. With an Isolationist U.S. objective all bets are off. The B.O.C. is in a tough place. Inflation is going to smack us pretty hard here...but confidence is pretty light. But if they do lower rates...the richer people who can get these cheap loans will just use it to help themselves.

Inflation won’t be stopped by interest rates in this case. Propping up the dollar with high interest rates doesn’t really help when the solution will be to invest and repatriate production that was occuring in the US. Along with building export infrastructure for Potash, Oil and other goods.

Lots of investment needed and lots of raw materials. As long as the global economy falls with the dollar low interest rates should not be punative

[Doctorfever]

Originally Posted by GGG

Inflation won’t be stopped by interest rates in this case. Propping up the dollar with high interest rates doesn’t really help when the solution will be to invest and repatriate production that was occuring in the US. Along with building export infrastructure for Potash, Oil and other goods.

Lots of investment needed and lots of raw materials. As long as the global economy falls with the dollar low interest rates should be punative

Did you mean to say “low interest rates should not be punitive”?

[Reggie28]

I have a rental property and I should increase the mortgage amount by 200k. There is about 18 months left on the term with a rate of prime -0.99%. Because it is a variable rate, is it as simple as adding the 200k to the principle and keeping the terms the same or will I have to break the existing deal and come to new terms with the bank?

Girlfriend is in the same boat with a different property, but she is on a fixed rate that is very good. I imagine in her case the bank will offer a blended fixed rate on a new term.

Anyone deal with this type of situation before?

[opendoor]

Originally Posted by Reggie28

I have a rental property and I should increase the mortgage amount by 200k. There is about 18 months left on the term with a rate of prime -0.99%. Because it is a variable rate, is it as simple as adding the 200k to the principle and keeping the terms the same or will I have to break the existing deal and come to new terms with the bank?

Girlfriend is in the same boat with a different property, but she is on a fixed rate that is very good. I imagine in her case the bank will offer a blended fixed rate on a new term.

Anyone deal with this type of situation before?

That would be a refinance. You would need to negotiate new terms and refinance rates are typically a bit higher than with normal mortgages.

[Sylvanfan]

Originally Posted by GGG

Lots of investment needed and lots of raw materials. As long as the global economy falls with the dollar low interest rates should not be punative

That's why I say the B.O.C. is in a tough spot. They're being forced into a rate cut to stimulate investment at a time when they are well aware the inflation on a lot of essentials will occur, plus with job losses and a contraction in the economy. But like Covid...the very wealthy will be able to put a couple laps on the field here in terms of their personal net worth vs the mean.

But I am very confident that the only balance to lower than desired interest rates brought on by an unexpected crisis will be a follow up period where they need to raise them quickly and keep them high to try and get things balanced. So that's why I think things will be pretty turbulent for some time. So long as the U.S. is under control of an Orange lunatic who might be a Russian asset, there will be no balance or stability.

[Nancy]

Bank of Canada Rate Cut Is Driving Mortgage Costs Higher

Canadian mortgage borrowers waiting on the central bank may be disappointed by its latest move. The Bank of Canada (BoC) cut its overnight rate by 0.25 points to 2.75% on Tuesday. Many professionals applauded the decision, believing it would improve mortgage affordability. Unfortunately, that may not be the case, as the decision boosted inflation expectations and sent bond yields higher. This ultimately applies upward pressure on popular fixed-rate products, raising the floor of borrowing costs.

[The Fonz]

BOC decides to hold the rate at 2.75%

[TheIronMaiden]

Drats.

[CorsiHockeyLeague]

God dammit. I need a TD mortgage rate in the 3s.

[Jason14h]

A little surprised but I think they want flexibility for bigger rates drops later in year when stuff is more clear with tariffs

Optics of dropping bigger and more later in year might help more then right now

[Shazam]

Originally Posted by CorsiHockeyLeague

God dammit. I need a TD mortgage rate in the 3s.

TNM has 5 year @ 3.99%, if you're hellbent on staying with TD you could use it for negotiating.

[NinePack]

I've been offered 3.74 % for 5 years locked. I might just take that. I was hoping it would drop one more time. Still pretty good I think. First national.

[Reggie28]

Originally Posted by NinePack

I've been offered 3.74 % for 5 years locked. I might just take that. I was hoping it would drop one more time. Still pretty good I think. First national.

Did you end up locking in for 5 years at that rate? I have to refinance, they offered me prime -.5%, hoping I can grind them down to -.75% if I chose variable. Did you inquire about variable? Curious what discounts lenders are offering.

This is with National Bank, it gets tricky because it is partitioned and the original portion (prime -.99%) doesn’t expire for another 18 months.

[Engine09]

CIBC gave me prime -0.95% in Dec, variable. I'm sitting at 4.00% right now.