Showing posts with label Prime Lending Rate. Show all posts
Showing posts with label Prime Lending Rate. Show all posts

Friday, February 24, 2023

Bank of Canada current interest rate



In January 2023 the Bank of Canada raised it's benchmark interest rate again, this time to 4.50%

Bank of Canada raises borrowing costs for seventh time in a row amid stubbornly high inflation. The Central bank has been raising rates aggressively to rein in sky-high inflation.

Since March of 2022, the central bank has raised its key interest rate six consecutive times, bringing it from 0.25 per cent to 4.50 per cent.

The Bank of Canada hiked its trendsetting interest rate by 1/2 percentage point on Wednesday.

The current rate is 4.50%

The Bank Prime rate for most lenders now stands at 6.70%
Toronto Real Estate Board (TREB) Average Prices and Graph

For more information please contact A. Mark Argentino

A. Mark Argentino, Broker, P.Eng.,
Specializing in Residential & Investment Real Estate
RE/MAX Realty Specialists Inc., Brokerage
2691 Credit Valley Road, Suite 101, Mississauga, Ontario L5M 7A1
BUS. 905-828-3434
FAX. 905-828-2829
E-MAIL: mark@mississauga4sale.com
Website: Mississauga4Sale.com

Wednesday, April 13, 2022

Bank of Canada raises its key interest rate by 0.5% to 1%

Bank of Canada raises its key interest rate by half a percentage point to 1% on WEDNESDAY, APRIL 13, 2022

Bank Prime lending rates are now 3.2%

It's the first half-point hike in more than two decades amid soaring inflation. 


This is a great article about the future of real estate in the GTA and how interest rates may be one of the factors that affect the real estate marketplace, or read below:

Toronto Real Estate forecast 2022, April 11, 2022 
Wednesday, April 13⋅7:00 – 8:00am

Toronto real estate forecast 2022
by Corben Grant on 11 Apr 2022

After a hectic two years, in both real estate and the world at large, we have made it 2022 and it seems we are now entering yet another new phase. Though the world is slowly returning to normal, those paying attention to the real estate market are left wondering – what exactly does “normal” look like? How will things play out following the unprecedented market conditions of the last two years?

In Toronto, one of Canada's largest real estate markets, thousands of investors are now trying to anticipate what the future will hold and others are wondering if now is the time to buy in.

Telling the future is understandably a difficult and ultimately futile practice. However, there are many informed analysts who can at least give a pretty good guess. By looking at past market conditions, upcoming economic and legislative changes, and a bit of guesswork, it’s possible to make a more informed forecast.

In this article, we will explore what the 2022 Toronto real estate market could look like.

Current statistics
Before we get into the future of the market, we should probably understand how it stands now. All data in the following section is sourced from the Toronto Regional Real Estate Board's (TRREB) most recent market statistics from March 2022.

In March of 2022, the Toronto real estate market continued at an active pace though in some key areas it showed some signs of balancing. Overall, it was marked as the third-best March on record and the second-best first quarter on record.

Housing prices down from February 2022
The average overall price across the GTA and for all housing types was $1,299,894. This marks one of the first decreases in price seen in quite a while, down from $1,334,544 in February. This also goes against the seasonal trend that would tend to see prices begin to rise into the spring market. Despite the month-over-month dip, price growth still remained in the double digits on a year-over-year basis, up from $1,097,351 in March of 2021.



Detached homes sold at an average price of $1,920,018 and $1,632,832 in Toronto and the GTA respectively, both down from the previous month for a combined average of $1,697,396. Prices weren't down across the board, however, as the condo market notably saw marginal price gains from last month.

Both listings and sales were lower than the high records of March 2021, though they were up from the previous month. Supply on the market remained at around just one month.

An anomaly or a sign of things to come?
This last month then presented a moderately more balanced market for Toronto, though we are far from out of the woods yet. What remains to be seen is if this is a temporary off month or the start of a longer trend in the market.

TRREB Chief Market Analyst Jason Mercer is quoted in the release as saying that though competition among buyers remains strong in most segments, the city did “experience more balance in the first quarter of 2022 compared to last year. If this trend continues, it is possible that the pace of price growth could moderate as we move through the year.”

What 2022 will hold for the Toronto housing market
There are years where housing markets are fairly easy to predict with some accuracy as was the case for some of the pre-pandemic years in Toronto. However, the last two years have proven that unexpected events are very real and major disruptions can happen out of nowhere.

2022 is looking to be another year of unpredictable changes in the market. With the world recovering gradually from a global pandemic, the reinvigoration of the Canadian economy, rising interest rates, and new legislation coming into effect to cool the real estate market, there will be no shortage of potential shake-ups this year.

Each of these new factors will naturally have its own effects, but the combined effect of all the changes together becomes increasingly difficult to call. In the next section, we will look at some of the new changes expected for this year and how they can affect the housing market.

Rising interest rates
One of the biggest changes that are essentially guaranteed to play a role in the market this year is the interest rate increase from the bank of Canada.

Many reaped the benefits of record low rates in 2020-2021
During the depths of the pandemic, the Bank of Canada kept its prime interest rate at a record low level in order to aid the economy in getting through difficult times. While it may have helped the economy, the low-interest rates also played a part in driving up prices in Canada's real estate market, as well as growing inflation. With such low interest rates, buyers were able to afford higher mortgages so prices began to grow.

Multiple interest rate hikes predicted for this year
Now, the central bank has begun to raise interest rates, with a first hike occurring in March and at least a few more predicted for the rest of the year. The impact of gradually increasing rates on the Canadian housing market won't be instantaneous, but we should see effects sooner than later. As interest rates rise, more potential buyers will fail to qualify for loans, lowering the demand on the market. Those who do qualify will need to look for lower-priced homes. The hope is that this will cool the market somewhat.

New legislation in the Toronto real estate market
Housing concerns have been on the top of the agenda across nearly all party lines in Canadian politics for the last number of years and new legislation on both the provincial and federal levels are set to be put in place this year to curb the rampant housing market.

Non-Resident Speculation Tax
Recently, the province announced an increase to the Non-Resident Speculation Tax and a widening of its applicable area. The result is that any foreigners looking to buy homes in Toronto will be forced to pay a tax of 20%. This should reduce some demand on the market and allow Canadian residents a chance to buy homes with less competition.



Foreign Homebuyers Ban
On the federal level, the liberal government is set to take an even stricter stance, with a proposal to ban almost all foreign purchases for up to two years. This would all but erase completion from foreign buyers and reduce a lot of competition for homes. The matter of foreign buyers is contentious as there is still plenty of domestic demand for homes that will keep prices elevated, however, reduced competition is nonetheless welcome.

New housing supply initiatives
The Ontario government is also moving forward with plans to increase housing supply in coming years by streamlining development processes, with hopes to build 1.5 million new homes in the next 10 years. This should serve to combat the low housing supply that has plagued the market in recent years.

Toronto Vacant Homes Tax
Finally, Toronto itself has a newly instated Vacant Homes Tax coming into effect that hopes to bring more houses to the market. Such a tax has been effective in Vancouver to reduce the overall number of vacant homes, relieving some pressure on both the resale and rental markets.

In combination, these new laws should reduce demand and competition, while increasing the housing supply. While it is unlikely to cause a significant drop in house prices, it will allow for the market to cool and balance and help to ease the incredibly strong seller's market seen in recent years.

Economic recovery
Another aspect that can come into play for the housing market is an overall move towards a stronger Canadian economy in the recovery from the pandemic recession. As supply chain conditions begin to improve, this can have positive effects on the price of new-home development. Reigning inflation will also help ease financial burdens on Canadians and growing rates of employment and income will allow more Canadians to enter the market.

Unexpected events
One thing that recent times have made abundantly clear is that you never know what is around the corner. Even our best predictions will fail nine times out of 10 times to foresee the most unexpected events.

The two biggest causes of uncertainty right now come from the continued presence of COVID
15 minutes before
Mark Argentino


Toronto Real Estate Board (TREB) Average Prices and Graph

For more information please contact A. Mark Argentino

A. Mark Argentino, Broker, P.Eng.,
Specializing in Residential & Investment Real Estate
RE/MAX Realty Specialists Inc., Brokerage
2691 Credit Valley Road, Suite 101, Mississauga, Ontario L5M 7A1
BUS. 905-828-3434
FAX. 905-828-2829
E-MAIL: mark@mississauga4sale.com
Website: Mississauga4Sale.com

Thursday, April 16, 2020

The Bank of Canada reduced the prime rate to 1/4% on March 27, 2020 - this is all in response to COVID-19 crisis in a effort to help with reducing interest payments paid by Canadians during this crisis.

The Bank of Canada has reduced the bank rate twice in the past 30 days, both times by 0.5%.

The current overnight rate is 0.25%

As of April 16, 2020 the Bank Prime Rate (rate charged to average customer) was 2.45%

The Bank of Canada Prime Rate is currently 0.25% and the current Prime Lending Rate is 2.45% The Bank prime rate is typically about 2% higher than the overnight rate, but for the past few years the banks are not passing along this entire amount and this is why the current bank lending rate to their prime to customers is 2.45% 


The major banks in Canada typically charge their best customers 2% to 2.2% above the Bank of Canada Prime Rate. Today, it's 2.20% above prime, which means that the Bank Prime or Prime Rate that we see is now 2.45% 

Bank Prime Rate means "best" and this is the rate that banks charge their absolute best customers for loans, which is usually only other lending institutions.

Changes in the Bank of Canada prime rate influence changes in other interest rates, including variable interest rate mortgages. This "bank rate" rate fluctuates based on economic conditions.

Mortgage Interest Rates over time
Toronto Real Estate Board (TREB) Average Prices and Graph
Click Graph to see Average Prices over time





For more information please contact A. Mark Argentino

A. Mark Argentino, Broker, P.Eng.,
Specializing in Residential & Investment Real Estate
RE/MAX Realty Specialists Inc., Brokerage
2691 Credit Valley Road, Suite 101, Mississauga, Ontario L5M 7A1
BUS. 905-828-3434
FAX. 905-828-2829
E-MAIL: mark@mississauga4sale.com
Website: Mississauga4Sale.com

Monday, November 05, 2018

Bank of Canada Prime rate now stands at 1.75%

The Bank Prime rate charged by most lenders now stands at 3.95%  read more about Interest rates  

The Bank of Canada Prime Lending Rate is the same as last month at 1.75%

Rates continue to rise.  This may be the time to lock in to a 2 or 3 year rate if there are some great rate specials offered to you. 


Toronto Real Estate Board (TREB) Average Prices and Graph

For more information please contact A. Mark Argentino

A. Mark Argentino, Broker, P.Eng.,
Specializing in Residential & Investment Real Estate
RE/MAX Realty Specialists Inc., Brokerage
2691 Credit Valley Road, Suite 101, Mississauga, Ontario L5M 7A1
BUS. 905-828-3434
FAX. 905-828-2829
E-MAIL: mark@mississauga4sale.com
Website: Mississauga4Sale.com

Thursday, April 19, 2018

Bank of Canada Interest Rate Announcement April 18 2018 - Maintain overnight rate target at 1.25 per cent

Greetings from Fabulous Mississauga! 


The Bank of Canada announced yesterday, April 18, 2018 they would maintain overnight rate target at 1.25 per cent

This means that the bank rate will remain at this level for at least the next 3 months.

The Bank of Canada governors made it very clear that Canadians must be prepared for a series of future interest rate increases.

See the full press release below.

All the best!
Mark




Bank of Canada maintains overnight rate target at 1 ¼ per cent

The Bank of Canada today maintained its target for the overnight rate at 1 ¼ per cent. The Bank Rate is correspondingly 1 ½ per cent and the deposit rate is 1 per cent.
Inflation in Canada is close to 2 per cent as temporary factors that have been weighing on inflation have largely dissipated, as expected. Consistent with an economy operating with little slack, core measures of inflation have continued to edge up and are all now close to 2 per cent. The transitory impact of higher gasoline prices and recent minimum wage increases will likely cause inflation in 2018 to be modestly higher than the Bank expected in its January Monetary Policy Report (MPR)returning to the 2 per cent target for the rest of the projection horizon.
The global economy is on a modestly stronger track than forecast in January, with upward revisions to growth and potential output in a number of major advanced economies. The outlook for the U.S. economy has been further boosted by new government spending plans. However, escalating geopolitical and trade conflicts risk undermining the global expansion.
In Canada, GDP growth in the first quarter was weaker than the Bank had expected, but should rebound in the second quarter, resulting in 2 per cent average growth in the first half of 2018. The economy is projected to operate slightly above its potential over the next three years, with real GDP growth of about 2 per cent in both 2018 and 2019, and 1.8 per cent in 2020. This stronger profile for GDP incorporates new provincial and federal fiscal measures announced since January. It also reflects upward revisions to estimates of potential output growth, which suggest the Canadian economy has made some progress in building capacity.
Slower economic growth in the first quarter primarily reflects weakness in two areas. Housing markets responded to new mortgage guidelines and other policy measures by pulling forward transactions to late 2017. Exports also faltered, partly owing to transportation bottlenecks. Some of the weakness in housing and exports is expected to be unwound as 2018 progresses.
The Bank anticipates that Canadian exports will strengthen as foreign demand increases, but not sufficiently to recover the ground lost during recent quarters. Export growth is being increasingly limited by capacity constraints in some sectors. Continued gains in business investment should build additional capacity in those sectors and in the economy more generally. However, both exports and investment are being held back by ongoing competitiveness challenges and uncertainty about trade policies.
Growth in consumption remains robust, supported by strong labour income growth. Wages have continued to pick up as expected, even after factoring out recent minimum wage increases in Ontario and Alberta. The Bank will continue to assess labour market data for signs of remaining slack.
Some progress has been made on the key issues being watched closely by Governing Council, particularly the dynamics of inflation and wage growth. This progress reinforces Governing Council’s view that higher interest rates will be warranted over time, although some monetary policy accommodation will still be needed to keep inflation on target. The Bank will also continue to monitor the economy’s sensitivity to interest rate movements and the evolution of economic capacity. In this context, Governing Council will remain cautious with respect to future policy adjustments, guided by incoming data.


I hope this finds you Happy and Healthy!
All the Best!
Mark
A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate

RE/MAX Realty Specialists Inc.
Providing Full-Time Professional Real Estate Services since 1987

BUS 905-828-3434
FAX 905-828-2829  CELL 416-520-1577
mark@mississauga4sale.com

Mississauga4Sale.com


Wednesday, July 12, 2017

Bank of Canada increases by 1/4% to 3/4 per cent July 12 2017

Greetings from fabulous Mississauga!

As expected the Bank of Canada increased the prime rate by .25% (1/4%) this morning.

It will be interesting to see if the banks increase their lending rate and to what amount. 

Read part of the press release below and entire press release link at bottom

All the best!
Mark



Bank of Canada increases overnight rate target to 3/4 per cent

FOR IMMEDIATE RELEASE

12 July 2017

The Bank of Canada is raising its target for the overnight rate to 3/4 per cent. The Bank Rate is correspondingly 1 per cent and the deposit rate is 1/2 per cent. Recent data have bolstered the Bank’s confidence in its outlook for above-potential growth and the absorption of excess capacity in the economy. The Bank acknowledges recent softness in inflation but judges this to be temporary. Recognizing the lag between monetary policy actions and future inflation, Governing Council considers it appropriate to raise its overnight rate target at this time.
The global economy continues to strengthen and growth is broadening across countries and regions. The US economy was tepid in the first quarter of 2017 but is now growing at a solid pace, underpinned by a robust labour market and stronger investment. Above-potential growth is becoming more widespread in the euro area. However, elevated geopolitical uncertainty still clouds the global outlook, particularly for trade and investment. Meanwhile, world oil prices have softened as markets work toward a new supply/demand balance.
Canada’s economy has been robust, fuelled by household spending. As a result, a significant amount of economic slack has been absorbed. The very strong growth of the first quarter is expected to moderate over the balance of the year, but remain above potential. Growth is broadening across industries and regions and therefore becoming more sustainable. As the adjustment to lower oil prices is largely complete, both the goods and services sectors are expanding. Household spending will likely remain solid in the months ahead, supported by rising employment and wages, but its pace is expected to slow over the projection horizon.  At the same time, exports should make an increasing contribution to GDP growth. Business investment should also add to growth, a view supported by the most recent Business Outlook Survey. 

Read the full release here:



I hope this finds you Happy and Healthy!
All the Best!
Mark
A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate

RE/MAX Realty Specialists Inc.
Providing Full-Time Professional Real Estate Services since 1987

BUS 905-828-3434
FAX 905-828-2829  CELL 416-520-1577
mark@mississauga4sale.com

Mississauga4Sale.com