Fiscal Policy & Your Future: Navigating the Changing Tide of Mortgage Rates

Amid dynamic economic conditions, staying ahead with informed insights is crucial. Recent analysis from Scotiabank has shed light on the Canadian government’s fiscal policies’ significant role in guiding the Bank of Canada’s monetary policy direction. According to a recent Scotiabank report, “We estimate that government consumption and pandemic transfers to households account for about 200 basis points of the 475 basis points increase in the Bank of Canada’s policy rate.”

As a conservative estimate, this might mean an additional $17,000 cost on an average 5-year mortgage term, underscoring the importance of proactive financial planning. 

While the necessity of this spending in bolstering the economy during the pandemic is recognized, it has also led to federal spending reaching around 16% of GDP, well above the average of 13%.

While an economic slowdown is expected to bring down rates, likely, they won’t fall as much as some might hope.  

This is where our strategic foresight becomes your asset. We encourage you to stay in close contact with us, as we are poised to navigate these shifts together, ensuring your mortgage strategy remains advantageous and forward-thinking in anticipation of these fluctuations.