Mortgage Blog

Getting you the mortgage you deserve

Bank Of Canada Rate Update December 9, 2021

December 8, 2021 | Posted by: Justin Emilio

Bank of Canada maintains policy rate and forward guidance

The Bank of Canada today held its target for the overnight rate at the effective lower bound of ¼ percent, with the Bank Rate at ½ percent and the deposit rate at ¼ percent. The Bank's extraordinary forward guidance on the path for the overnight rate is being maintained. The Bank is continuing its reinvestment phase, keeping its overall holdings of Government of Canada bonds roughly constant.

Bank Of Canada Rate Update December 9, 2021

The global economy continues to recover from the effects of the COVID-19 pandemic. Economic growth in the United States has accelerated, led by consumption, while growth in some other regions is moderating after a strong third quarter. Inflation has increased further in many countries, reflecting strong demand for goods amid ongoing supply disruptions. The new Omicron COVID-19 variant has prompted a tightening of travel restrictions in many countries and a decline in oil prices, and has injected renewed uncertainty. Accommodative financial conditions are still supporting economic activity.

Canada's economy grew by about 5½ percent in the third quarter, as expected. Together with a downward revision to the second quarter, this brings the level of GDP to about 1½ percent below its level in the last quarter of 2019, before the pandemic began. Third-quarter growth was led by a rebound in consumption, particularly services, as restrictions were further eased and higher vaccination rates improved confidence. Persistent supply bottlenecks continued to inhibit growth in other components of GDP, including non-commodity exports and business investment.

Recent economic indicators suggest the economy had considerable momentum into the fourth quarter. This includes broad-based job gains in recent months that have brought the employment rate essentially back to its pre-pandemic level. Job vacancies remain elevated and wage growth has also picked up. Housing activity had been moderating, but appears to be regaining strength, notably in resales. The devastating floods in British Columbia and uncertainties arising from the Omicron variant could weigh on growth by compounding supply chain disruptions and reducing demand for some services.

CPI inflation is elevated and the impact of global supply constraints is feeding through to a broader range of goods prices. The effects of these constraints on prices will likely take some time to work their way through, given existing supply backlogs. Gasoline prices, which had been a major factor pushing up CPI inflation, have recently declined. Meanwhile, core measures of inflation are little changed since September. The Bank continues to expect CPI inflation to remain elevated in the first half of 2022 and ease back towards 2 percent in the second half of the year. The Bank is closely watching inflation expectations and labour costs to ensure that the forces pushing up prices do not become embedded in ongoing inflation.

The Governing Council judges that in view of ongoing excess capacity, the economy continues to require considerable monetary policy support. We remain committed to holding the policy interest rate at the effective lower bound until economic slack is absorbed so that the 2 percent inflation target is sustainably achieved. In the Bank's October projection, this happens sometime in the middle quarters of 2022. We will provide the appropriate degree of monetary policy stimulus to support the recovery and achieve the inflation target.

Information notes

TA market notice outlining details of the reinvestment phase will be published on the Bank's web site at 10:30 am ET today.

The next scheduled date for announcing the overnight rate target is January 26, 2022. The Bank will publish its full outlook for the economy and inflation, including risks to the projection, in the Monetary Policy Report at the same time.

Back to Main Blog Page

2023

Bank of Canada increases policy interest rate by 25 basis points, continues quantitative tightening

Bank of Canada raises policy rate by 25 bps to 4.5%

Before you lock in your variable rate

Budgeting for the Year Ahead

Alternative Lending

2022

Should You Spend the Full Mortgage Amount You're Approved For?

The Pros and Cons of Fixed vs. Variable Mortgages

Bank of Canada increases policy interest rate by 50 basis points, continues quantitative tightening

The Bank of Canada Hiked Rates The Full 50 bps

Bank of Canada increases policy interest rate by 50 basis points, continues quantitative tightening

Enjoying a Debt-Free Holiday

How Not to be House Poor

Job Loss and Your Mortgage Application

10 Things to Know About the Offer Process

A Six-Step, Back to Basics Financial Plan for Most Every Canadian

Canada's Inflation at 6.9% in October Supports a December Rate Hike

10 Important Questions to Ask Your Contractor

First-Time Homebuyer Tips

Bank of Canada Slows Pace of Rate Hikes

Bank of Canada Rate Update October 26, 2022

Best Ways to Plan for Your Down Payment

Bank of Canada Will Not Be Happy With This Inflation Report

Common Mistakes That House Flippers Make & How to Avoid Them

Credit Clean-Up!

Understanding Mortgage Trigger Points

Canadian Inflation Slows For the Second Consecutive Month

How Mortgage Rates Affect Buying Power?

Bank Of Canada Rate Update September 7, 2022

September 7th BoC Rate Hike

Adapting Your Finances

5 Reno’s With the Best ROI

Should You Pay Off Your Mortgage Early?

Gasoline Prices Dipped, But No Time To Celebrate

How Many Homes Should You View Before Buying?

Looking to buy your first home in BC? Here are programs that can help you with that goal

Breaking Your Mortgage Without Breaking The Bank - How Mortgage Penalties Are Calculated

5 Things to Consider When Building Your Own Home

Canadian Inflation Surged to 8.1% in June

Bank Of Canada Rate Update July 13, 2022

Tips for Buying Rental Investment Properties

Inflation, Interest Rates & Locking In

New to Canada?

5 Negotiation Secrets Smart Buyers Use to Get Better Deals

Bank Of Canada Rate Update June 1, 2022

Another Jumbo Rate Hike, Signalling More To Come

Dreaming of a Home Away From Home?

Reverse Mortgages and What to Know

How a Mortgage Pre-Approval Can Protect You from Rising Rates

Purchase + Improvements Mortgages

How is a Private Mortgage Different Than a Traditional Bank Mortgage

Have You Had Your Mortgage Check-Up?

Purchase Plus Home Improvements?

Home-Buying 101: A Guide to Purchasing Your First Home

Bank Of Canada Rate Update April 13, 2022

From tax breaks to homebuyer incentives, how the 2022 federal budget affects Canadians’ wallets

5 Benefits of an Investment Property

Preparing for the Spring Market

Refinancing: What You Should Know

Tips for Picking the Right Home to Flip

Bank of Canada Starts Hiking Rates, Signalling More To Come

The Difference Between Bank of Canada Rate and Prime Rate

Bank Of Canada Rate Update March 2, 2022

Can Housing Upgrades Affect Your Insurance?

What to Look for During a Home Tour??

Understanding Insurance

Rent to Own Homes vs. Mortgage: How Do They Work?

Improving Your Financial Direction

Bank Of Canada Rate Update January 26, 2022

Top 10 Questions to Ask Your Mortgage Broker in BC

How Much of A Mortgage Can You Afford?

Housing Market Predictions

2021

Prequalification and Pre-Approval—What is the Difference? Home Buying in BC

Bank Of Canada Rate Update December 9, 2021

Selling Your Home in Winter

Mortgages for the Self-Employed

What to do if You Are Denied a Mortgage

How to Know if it's Time to Refinance

7 Steps for Mortgage Prep

Up for Renewal??

Bank Of Canada Rate Update Oct 27, 2021

Five Great Benefits of Owning an Investment Property

What Is Home Equity and How Can I Build It?

Why Invest in a Home Inspection

Low Credit is Spooky! Get Better Credit With The 5 C’s

Fall Home Tips

How to Handle a Low-Ball Offer in Real Estate | Home Selling Advice

5 Approval Roadblocks You Should Know

How to Talk to Your Kids about Finances

Bank Of Canada Rate Update Sept 8, 2021

What are credit scores and how are they important?

Getting a Mortgage as a Student

What Happens if You Lose Your Job Before Closing?

How a Funding Condition Can Secure Purchasers From Financial and Legal Penalties in BC

Bank Of Canada Rate Update July 14, 2021

Risks of Putting Down a Firm Offer with a Pre-Approval BC

Low Rates in BC Helping Buyers Pay Off Their Mortgages at Record Pace

Buying Land To Build A Home in BC

Bank Of Canada Rate Update June 9, 2021

Your House-Closing Timeline: A Step-By-Step Guide | BC

What Are the Next Steps After Your Offer Was Rejected? In BC

Investing In An Apartment Complex

2021 Mortgage Stress Test - Latest Updates

Things To Look Out For When Viewing A Property

April 21-2021 - Bank of Canada will hold current level of policy rate until inflation objective is sustainably achieved, adjusts quantitative easing program

Stress Test 2021

April 2021-Bank of Canada Releases Results from Consultations on Inflation and Monetary Policy

Buying A Home As A Senior Citizen | BC

Top 10 Considerations When Moving to a New Area

Multi-Family Lending: What You Need To Know About Hard Money Loans

Why Borrowers May Choose a Private Mortgage

How to Handle a Mortgage After a Separation or Divorce

How Good vs Bad Debt Impacts Your Household

Benefits of Investing in Multi-Family Real Estate

2020

Top 3 Biggest Home Seller Mistakes

3 Tips on How to Better Your Credit Score

Renting VS Buying a Home

Five Tips for Buying a Condo

Cons of For Sale By Owner (FSBO)

Real Estate 101: Getting Your Home Ready To Show

Tips for Real Estate Investors

Reverse Mortgages – Impact on Heirs

Advice for First-Time Home Sellers

Top 3 Home Improvement Ideas to Increase the Value of Your Home

5 Things NOT To Do When Selling Your House

Home Inspections, How They Can Benefit Home Buyers and Sellers

Useful Tips for Buying and Selling A Home During Covid-19

When Is Mortgage Refinancing a Bad Idea?

Is it a Good Time to Become a First-Time Home Buyer?

5 First-Time Homebuyer Mistakes To Avoid

5 Smart Ways to Use a Home Equity Line of Credit

What should you consider when refinancing your mortgage?

6 Signs a Home Will Likely Increase In Value

6 Persistent Real Estate Myths You Really Need to Ignore

Should You Pay Off Your Mortgage Early?

New Stress Test On Insured Mortgages

Real Estate 101: Essential Tips for First-Time Home Buyers

10 Essential Tips for Taking Out Your First Mortgage

Should You Refinance Your Mortgage?

Should You Spend the Full Mortgage Amount You're Approved For?

Take Advantage of Low Interest Rates – Refinance Your Mortgage Today!

2019

Strategies to Dig Yourself Out of the Debt Hole

Why You Need an Emergency Fund And How to Get One

The Benefits of Investing in Income Producing Properties

4 Hidden Problems That Could Be Hurting Your Home Sale

users image

Hi, How can I help you?