At its final announcement of 2024, the Bank of Canada slashed the overnight lending rate by a half percentage point to reach 3.25% as it closes out the year.
Ciao! Welcome to a new episode of Building Wealth Through Real Estate...Brick by Brick with me, Nico James-Bock, Founder of The CondoWiz™ Group and Broker at Royal LePage Signature Realty in Downtown Toronto. I'm joined in today's episode by Dominion Lending's Sean Humphries, an award-winning mortgage broker based in Toronto.
With inflation around 2%, the economy in excess supply, and recent indicators tilted towards softer growth than projected, Governing Council decided to reduce the policy rate by a further 50 basis points to support growth and keep inflation close to the middle of the 1-3% target range. Governing Council has reduced the policy rate substantially since June. Going forward, the will be evaluating the need for further reductions in the policy rate one decision at a time. Their decisions will be guided by incoming information and our assessment of the implications for the inflation outlook. The Bank is committed to maintaining price stability for Canadians by keeping inflation close to the 2% target.
The next scheduled date for announcing the overnight rate target is January 29, 2025. The Bank will publish its next full outlook for the economy and inflation, including risks to the projection, in the MPR at the same time.
We also discuss the latest mortgage rules that kick in on December 15th.
Starting December 15, 2024, new mortgage rules will expand eligibility for mortgage insurance to homes valued at up to $1.5 million. Under these rules, buyers will need to put down a minimum of 5% on the first $500,000 and 10% on the portion between $500,000 and $1.5 million.
Back in July 2024, the government announced that lenders could offer 30-year amortizations on insured mortgages for first-time homebuyers purchasing new builds. As of December 15, 2024, this measure will be extended to all first-time homebuyers, and all buyers of new builds, including condos. By stretching mortgage payments over a longer period of time (30 years instead of the current maximum of 25), homeowners can benefit from lower regular mortgage payments.
That's it for today's episode.
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