Will They Or Won't They - There's a 65% Chance the Bank of Canada Will Lower the Rate in June.

Thanks for my friend Kimberly Coutts I have some info for you about mortgages and mortgage rates and how rates affect current mortgages etc.

First of all, "most" economists in Canada are saying that there is a 65% chance that the Bank of Canada will cut rates in June. So, "Will they or won't they?" really is the question here. I guess 65% of economists say yes, and...I guess 35% say they won't (look at me! Doing math!)

Call me to discuss what that will mean for prices. If you're waiting for the rates to drop before you buy you may be in for a rude awakening!

The current rates, even with a dip, will have a pretty significant affect on renewals too.

Here’s a quick rundown:

• 2024: $186 billion, affecting 548,000 mortgages

• 2025: $315 billion, impacting 929,000 mortgages

• 2026: $400 billion, influencing 1,179,000 mortgages

In Vancouver, the average mortgage size is around $522,000. Homeowners are bracing for potential payment shocks, especially those who secured their mortgages between 2020 and 2022 when interest rates were at historic lows. If you have a low fixed-rate mortgage or a static payment variable rate mortgage, you might feel this shock more than others.

The issue is that many mortgage holders are just receiving letters from their lenders with much higher rates and no additional guidance. Not everyone realizes that these terms can be negotiated or that they have other options available.

Here’s what I’m noticing with my clients:

Upgraders and Movers

These folks are either looking to sell and buy a new, upgraded property or rent out their current home and purchase a new one. Generally, they’re not feeling the financial pinch and have some equity built up in their homes, giving them more flexibility.

Worried and Stressed

On the flip side, some clients are anxious about their current debt loads and upcoming renewals. Many of them aren’t aware of their options or how to negotiate better terms, which adds to their stress.

So, if you're facing a mortgage renewal, remember: you do have options, and it’s worth exploring them to find the best possible terms for your situation.