BoC rate hikes may be over for 2023

February 2, 2023



Some analysts see the Bank of Canada (BoC) halting interest rate increases after it boosted the overnight rate by 25 basis points to 4.50 per cent on January 25, 2023. BoC marked an unprecedented eight straight increases in the past twelve months. It indicated rate hikes are on hold for now—in line with what the market was expecting them to do—noted James Laird, president of Toronto-based mortgage lender CanWise. “We can expect the Bank [BoC] to now hold the key overnight rate throughout this year, unless they observe that we are not on track to get inflation down to 3 per cent by the middle of 2023 and 2 per cent in 2024,” Laird said.
“At present, the Bank believes core inflation has peaked and will consistently move towards their targets this year and into 2024. If this happens, Canadians can expect rate holds and possibly rate drops in 2024.”
He said that anyone who has a variable-rate mortgage or home equity line of credit (HELOC) will see their rate increase by a quarter point—bringing the sum of their total rate increases in the last 12 months to 4.25 per cent.
“Anyone shopping for a fixed-rate mortgage this year can expect rates to continue to decrease as long as inflation numbers track the Bank’s targets,” Laird added.