Think Toronto interest rates rising is a distant memory?

Not so fast.

In a recent Bank of Canada press release the BOC chose to hold steady it’s benchmark interest rate at a .25%.  Noting that the economy and it’s recovery:

“continues to require extraordinary monetary policy support”

In an about face, the Bank of Canada is turning it’s back on a previously very conservative and cautious sentiment from 2020.  The recent releases’ outlook is surprisingly optimistic and energetic.

But hold up, hold up.

The goal of the Abode Realty team is certainly not to pretend we’re economists!  For an in depth read on Toronto interest rates rising, along with the nation, head on over to the Bank of Canada release itself.  For a “Cole’s notes” version – keep on reading!

So let’s break it down, simple and to the point.

As terrible as the First, Second and now Third waves of the pandemic have been.  The economy is now propped up by low interest rates and the subsequent real estate boom that’s happened as a part of that.

The Bank of Canada doesn’t want to do anything that would harm that economic growth right now, considering other areas of the economy that are suffering (small businesses are hurting, lockdowns continue to rule lives and inflation is likely upon us).  That means rates are staying low.

However.

The BOC is now forecasting a better economic outlook than previously thought.  They now think the economy is going to grow a little over 6% in 2021.  And then a little over 3% in both 2022 and 2023.  An increase of 2% (compared with the 4% that was originally called for in 2021).

To give our economy the magic boost it needed, the government had been keeping interest rates low. However, the optimistic change in overall economic forecast means we need less “propping”, if you will.  Which means an interest rate increase is soon on it’s way.

When exactly?

While we can’t be certain, based on the BOC release, a rise in the latter half of 2022 is to be expected.

Toronto interest rates rising is on the horizon indeed!

-Abode Realty

Are you a home owner? Couple this news with sky rocketing real estate prices and that our friends means that there’s no better time than now to refinance! 

Unlock the hidden equity available to you in your home.  Finance an investment property for you and your family today.  Contact us at Abode Realty to learn more.