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Clinton chats with CityNews 95.7 host, Todd Veinotte about the Bank of Canada announcement. The Bank of Canada increased the key overnight rate by 50 basis points, which is the largest increase in 20 years. The guys talk about what this means for Canadian mortgages and if rates will continue to rise.
Bank of Canada Announcement – April 13, 2022: Largest rate increase in 20 years
Don’t feel like watching the video? Check out the transcript below.
Largest rate increase in 20 years
Todd Veinotte: [00:00:00.39] All right. I just wanted to have a quick chat with Clinton Wilkins this morning. Half a point percentage increase in the Bank of Canada’s key interest rate. It’s the biggest increase in more than 20 years. Clinton Wilkins, our mortgage guru, what’s your take on this big increase? What are your thoughts?
Many people were not surprised by the big increase
Clinton Wilkins: [00:00:14.49] Well, I don’t think anybody was surprised, Todd. I actually put a poll up on Twitter this morning and 80% of people who answered our poll thought there was going to be a 50 basis point increase. So, not a big surprise. It certainly will be a shock to some borrowers’ pocketbook.
On a $300,000 mortgage, your payment will be approximately $75 more
Todd Veinotte: [00:00:32.28] How so? What does it mean for people financially?
Clinton Wilkins: [00:00:35.46] Well, let’s say the average mortgage in Halifax, Todd, is $300,000. Households that have an adjustable rate mortgage will likely see an increase in their payment of somewhere around $75 a month.
Todd Veinotte: [00:00:47.19] Yeah, for sure. So what are we expecting moving forward? From what I’ve been reading, this probably is the last increase for a bit. Is that what the tea leaves are telling you as well?
Bank of Canada wants Canadians to save money
Clinton Wilkins: [00:00:58.53] I think that, you know, they wanted to give a sharp message to Canadians, Todd. They really want Canadians to stop spending and start saving, to obviously stay the inflation. That’s the reason they’re doing this. I think the prime rate and the key overnight, it’s going to continue to increase over time, Todd, if the inflation does not come to basically the target.
Some economists think that we’re going to be at target by the end of the year. But the Fed in the U.S. released that the inflation is basically at record highs and that will obviously have an impact on Canada as well.
Todd Veinotte: [00:01:34.74] Okay. Clinton, always great. Thanks so much. Talk soon.
Clinton Wilkins: [00:01:39.03] Talk soon. Thanks, Todd.
Todd Veinotte: [00:01:40.05] All right. Take care.
If you have any questions, get in touch with us at Clinton Wilkins Mortgage Team! You can call us at (902) 482-2770 or contact us here.