Last week was a relief for the many Canadians that have variable rate mortgages. As most of know by now, The Bank of Canada for the first time since March 2022 held it policy rate – that is a whopping 9 increases we have experienced.
The expectation is for Inflation to come back down to 3% by middle of this year and then back to its target at 2% for interest rates cuts to commence. There have been moderate estimates suggesting the first rate hike will occur at the earliest in late 2023 or more likely Q1 of 2024.
This pause is conditional on what the inflation data will show over the next many months. The BoC also reiterated it commitment to ‘restoring price stability for Canadians’ even if this means increasing the policy rate in the future if required.