Current Economic Volatility & Proactive Tips

We're sure you've seen the headlines, we've been keeping an eye on them too. While many of them have been downright fear inducing, let's review the metrics:

• Canada 5yr Government Bond is up from 2.604% to 3.139% in 30 days.
• Brent Crude oil is up over $112/barrel as of March 30th
• The Dow Jones is down over 3300 points in the last 30 days

These numbers are certainly not positive. They aren't the sunshine and rainbows many were hoping for as we head into (hopefully) a busy Spring market. But, they're also something that is entirely out of our control. So, what does this mean for mortgage rates. Well, the short answer is, fixed rates have gone up slightly and variable rates haven't changed... yet.

As a refresher, fixed rates tend to change quickly as they're impacted by the bond market which is in turn (quickly) impacted by global economic activity. Variable rates move with the prime lending rate, which is anchored to the Bank of Canada Policy Rate. This gets reviewed (and possibly adjusted) every ~8 weeks at each scheduled meeting.
In the last 2 weeks, we've seen 5yr fixed rates increase by ~0.30%. For some, this increase may mean savings to be had in a refinance are no longer existent. For others, it's a drop in the bucket and means a few extra dollars a month. What this illustrates to everyone - lenders are are feeling uneasy and rates are reflecting it. This level of uncertainty is not new, which in and of itself is shocking.

The Bank of Canada is now dealing with two opposing forces: a soft labour market in need of stimulation and a potential increase to inflation. Suddenly, there's a discussion on interest rate HIKES. While we are in the early stages, there are early predictions that the Bank of Canada could increase interest rates 2-3 times in 2026. This is a significant shift from earlier expectations of the Bank of Canada holding the key interest rate through 2026. Keep in mind, these predictions are frequently changing.

Whether you're a current homeowner or just starting to explore the housing market, it's important to evaluate your own risk tolerance.

So, what can we, as consumers, do to best protect ourselves? Be proactive.

Here are a few simple ways to approach your mortgage with that mindset:

• Thinking about buying? Reach out sooner than you think to get a pre-approval. 
• Renewal coming up? Connect asap so we can get a rate held for you.
• Other debts building up? Let's review those numbers and see if there's a better strategy we can explore.

The best practice when it come to mortgages is the more time we have, the more options we can explore and the greater the potential benefit for you. If rates drop, excellent, we'll recalculate the mortgage at that time. If rates go up, you'll be extra happy you were prepared!

Remember, volatility is temporary; volatility is the swing of the pendulum. Right now, the swing is hard and fast. Take a breath, ask questions, and let us help you be proactive.

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If you have any questions on the above, or would like to talk strategy, please don't hesitate to reach out!

OAC, E&O