2 YEAR 1.88%*

3 YEAR 1.84%*

4 YEAR 2.04%

5 YEAR 1.60%*

5 YEAR Variable 1.60%*

Updated January 12th, 2021
*Special conditions apply. Interest rates are provided for information purposes only and are subject to change without notice.

Bank of Canada to drop qualifying rate

Mortgage Broker News ~ May 22, 2020

The Bank of Canada is set to reduce its qualifying rate ten basis points, from 5.04 to 4.94 percent, sources tell Mortgage Broker News. After the decrease, which is expected to be announced by Monday, the five-year fixed mortgage rate will have inched another step closer to a level not seen since 2016, when it was reduced to 4.64 percent.

It's a small change to be sure, but in the current environment, says BMO chief economist Doug Porter, every bit helps.

“Any change can make a difference at the margin, even if tiny,” he says. “I believe the much bigger issue for the housing market will be the broader economic outlook and the extent to which activity and jobs can recover as the re-opening progresses. Rates still matter, but much less so than in the recent past.”

John Vo of Spicer Vo Mortgage doesn’t expect the decrease to work wonders for his clients, but he applauds the Bank of Canada for the move all the same.

“Is it going to make a huge difference in affordability?” Vo asks. “No. But it’s encouraging to see that the Bank of Canada is cautiously looking at ways of helping people qualify.”

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