Danny Bell
Mortgage Broker - M13001996
danny.bell@premieremortgage.ca
Tel: 888-561-2525 | Cell: 289-200-9061
As expected, the Bank of Canada (BoC) raised its Overnight Rate last week (September 7, 2022) by 0.75% to 3.25%. The BoC says further increases are expected as the fight against inflation continues. Supply chain issues and the war in Ukraine play big factors in the current inflation problem.
The big banks have moved their Prime Rate to 5.45% (or more). This means variable rate mortgages and lines of credit rates have increased and become more expensive for borrowers, adding approx $40/month for every $100,000 owed, based on a 25 year amortization.
The mortgage qualifying stress-test is now over 7% for variable and some fixed rate mortgages. Mortgage and real estate industries leaders have called for easing of the stress-test. The Office of the Superintendent of Financial Institutions (OSFI) has stated it will not make a change to the stress-test at this time.
Consumer inflation measured by the Consumer Price Index (CPI), shifted down in July from 8.1% to 7.6%. Core inflation increased to 5.30% in July from 5.23% in June. Core inflation, which does not include items like food and fuel in its calculation, is what the BoC uses in its policy decisions. The BoC wants inflation between 2%-3%.
Whether you are first-time buyer or an experienced buyer with excellent credit, The Mortgage Centre has access to the very best products and rates available across Canada. Give us a call… we think you’ll be pleasantly surprised!
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