BoC Holds Interest Rate on Sept 6 2023

Joshua's trusted mortgage professional & friend, Jordan Lee, shares her thoughts on the Bank of Canada's September 6, 2023 decision on holding rates. 

The Bank of Canada's decision to hold interest rates today was primarily influenced by the recent GDP news for Q2 2023, which showed a surprising pace of 0.2%, significantly lower than the forecasted 1.5% for both Q2 and Q3 2023. Before the GDP figures were released, there was a 23% chance of a rate increase, but this dropped to just 7% after the announcement.

The Bank's primary goal is to curb rising inflation, which has been driven largely by increasing living costs, higher oil prices, and elevated food prices. With two more interest rate announcements scheduled for October 25, 2023, and December 6, 2023, there's a strong possibility of a 0.25% increase in either or both of these announcements, especially if inflation continues to rise.

In this market, securing a firm pre-approval and rate hold is essential for clients to protect themselves from future rate hikes, as rate increases directly impact affordability and monthly payments. While interest rate cuts don't seem likely in the near future, it's advisable to "date the rate, marry the home" – endure short-term pain with current interest rates to reap long-term benefits by holding onto a property and building equity.

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