Bank of Canada Interest Rate Decision with Sarah Thomas

Feb 1

Some of the most asked questions I receive from my clients these days are:

“Are mortgage rates going to go crazy?”
“Should I lock in my variable rate?”
“If I have a variable rate should I be scared?”
“I read/heard in the news that rates are….”

You may or may not know that this week the Bank of Canada held their target rate. This means there were no changes to the prime rate (currently 2.45%). This is excellent news for variable rate clients or people who hold a credit facility that has a variable rate.

Throughout the financial industry, it was thought that the Bank of Canada would increase the target rate “to test the market,” however, that was not the case. The next rate review will take place on March 2, 2022.

Where we ARE seeing changes is in fixed rates, which are on the RISE! Now, more than ever, choosing variable over fixed (in most cases) is actually your best bet! I know, I know… next you’ll say, “what if prime rate goes crazy and my payment goes up by hundreds of dollars?”

In most scenarios that I have worked through for my clients, choosing fixed over variable yields you a payment that is $200+ higher than variable, right off the bat! Why would you want to pay a larger payment immediately when you could save that hard-earned money in a TFSA, all while also saving thousands of dollars in interest? Plus, you would be paying down your principal faster, and in addition, would save yourself from paying a high penalty when you need to make a change to your mortgage!

Notice I said, “when you need to make a change to your mortgage?” That’s because the majority of Canadians rarely stay the full term of their mortgage, for a multitude of reasons. A few examples of why you may need to make changes to your mortgage would be moving to a new home, refinancing to access equity, adding a secured line of credit, divorce or separation, or plenty of other reasons.

The most important decision is choosing a mortgage that is suited to your specific needs. Not what your friend, family, co-worker, or neighbour has said you should do with your mortgage. Using the services of a professional like myself will be the smartest choice you can make. Relying on an outdated perspective or fearmongering that we often hear in the media these days will cause you to make a decision that will negatively impact you in the future. Visit my website to connect with me. I am happy to chat about mortgages with you over a phone call. It’s my passion to help my clients save thousands of dollars while also setting them up for financial success for years to come. Looking out for your interests is of the utmost importance to me.

For more information about the recent decision by the Bank of Canada, visit Sarah’s website: