We are pleased to inform you that today the Bank of Canada reduced its target for the overnight rate by 25 basis points to 4.75 per cent. This is the first interest rate cut since the tightening cycle began in March 2022.

Although there will likely be no significant changes to fixed mortgage rates in the short term, the CMBA-BC is strongly encouraged by this rate reduction, viewing it as a positive step towards alleviating the financial pressure on mortgage holders, borrowers, and homebuyers across British Columbia. Variable Rate Mortgages and Home Equity Lines of Credit will benefit from this rate drop as the prime lending rate decreases, which is welcome news to those borrowers.

“A rate cut is crucial to provide the first steps of relief to mortgage holders and borrowers across the province,” said Rebecca Casey, President of the CMBA-BC. “We are pleased that the Bank of Canada has begun to ease the financial burden on homeowners and homebuyers.”

CMBA-BC advocates for action to bring relief to mortgage holders and homebuyers in British Columbia, including in the form of lower interest rates.

The Canadian economy has shown meaningful signs of slowing, with the first-quarter growth rate of 1.7 per cent falling short of the Bank of Canada’s forecast of 2.8 per cent and economists’ estimates of 2.2 per cent, according to Statistics Canada. Inflation has also seen a significant decline. The annual CPI inflation rate peaked at 8.1 per cent in June 2022 but has since fallen to 2.7 per cent in April, comfortably within the Bank’s target range of 1 per cent to 3 per cent.

Due to elevated interest rates, on a year-over-year basis, the cost of shelter in British Columbia was up again in April according to BC Stats, with the cost of homeownership up 7.2 per cent and the cost of renting increasing 7.1 per cent. Many British Columbians are already at a tipping point.

CMBA-BC will continue to advocate for policies that support mortgage holders and facilitate a stable, prosperous housing market in British Columbia.

The next scheduled date for announcing the overnight rate target is July 24, 2024. The Bank will publish its next full outlook for the economy and inflation, including risks to the projection, in the MPR at the same time.

Published by the CMBA -Canadian Mortgage Brokers Association