Yesterday we received our February inflation numbers, giving us a bit of a sigh of relief, at least in how it relates to mortgage rates. The reading showed an inflation rate of 5.2%, down from 5.9% in January. This was the largest drop since April 2020.
This does seem a bit confusing as we seen a double digit increase on our trips to the grocery store. So how is our inflation rate down? While food rose 10.6% in February, the inflation rate drop is largely attributed to the Russian invasion of Ukraine and the effect it had on the global economy, drop in gas prices, and less shelter cost growth.
As a result, we can expect no raise in the prime rate for the next announcement on April 12th. Some are even speculating we may see a slight decrease. We have seen the Bank of Canada increase its rate by 425 basis points over the last year and enough is enough! Here at The Place to Mortgage we are holding tight to the hope that the declining pace of inflation will now mean the Bank of Canada is at the very least done with the increases.
To find out how the Bank of Canada rate effects your variable mortgage rate read here. https://www.theplacetomortgage.com/how-does-the-bank-of-canada-rate-affect-you/
