It’s quickly becoming old news – that the Bank of Canada (BoC) is maintaining its overnight rate at 1%.

In its last announcement, on October 23rd, there was one slight difference from the previous rate announcements dating back to early 2012. Namely, the new BoC Governor, Stephen Poloz, has abandoned the previous administrations’ continued warnings of impending tightening (or increase of the overnight rate). Instead, citing warnings of continued low inflation and lack of any significant economic recovery, the BoC is planning on holding interest rates at these low levels for some time to come. 

In a meeting, shortly thereafter, private sector economists, Finance Minister Flaherty said he didn’t intend to interfere with the housing market “at this time.” That would imply that he is not going to make any changes just yet. What we have learned over the past five years is that “just yet” certainly means “it may be coming sooner than you think.” And it may have just arrived. A couple of weeks ago, Flaherty said in an interview, “I’ve intervened four times in the last several years, and I’ll intervene again if I have to to make sure we don’t create a housing bubble.”

Over the next few weeks we will have to pay close attention to housing market activity in Canada to see if it is tapering and also have to watch the impact if fixed interest rates do drop. In this respect, lower rates may not be such a great thing as we could be facing a fifth round of changes. We have heard some people talk about those potential changes — the most popular idea is capping amortization on conventional loans to 25 years, similar to high ratio loans. 

What I have learned is to expect more changes. It’s not that we can just see change coming on the horizon, plan for it and then adapt. We must be nimble, flexible and responsive each and every day. 

As a Mortgage Broker, I know what my clients’ needs are and how they are being impacted by this wave of constant change. I can then help them navigate to find the absolute best available options for their unique mortgage financing situations.

Contact me if you want to understand how past or future changes might impact your ability to get a mortgage.