With Canada’s housing market evolving, keeping track of mortgage rates is essential for anyone looking to buy a home.
Whether you’re a first-time buyer or looking to refinance, mortgage rates impact your financial decisions. In this post, we will explore the revised mortgage rates in 2024, how they have shifted, and what factors affect them.
Mortgage rates in Canada, like elsewhere, are the interest rates on loans taken to buy a home. When someone doesn’t have enough funds to purchase a home outright, they can get a loan, and the interest they pay on that loan is the mortgage rate.
Canada Mortgage Rates Of All Provinces In 2024
Mortgage rates in Canada are closely tied to the economy, particularly inflation. As inflation rises, so do mortgage rates. This means that as the cost of goods increases, the interest you’ll pay on a home loan will likely increase too.
However, in 2024, we’re seeing a decline in inflation, which has started to lower mortgage rates as well.
In December 2023, inflation in Canada was around 7%. As inflation trends cooled in June 2024, the Bank of Canada began cutting interest rates. These cuts are welcome news for homebuyers, as they make borrowing more affordable.
Recent Revisions
In the first half of 2024, the Bank of Canada cut the mortgage rate by 0.25 points twice. This means:
- In May 2024, the rate was 5%.
- By June 2024, it had decreased to 4.75%.
- In July 2024, the rate dropped again to 4.50%.
As borrowing becomes cheaper, we could see more Canadians entering the housing market, which could drive up demand for homes. However, Bank of Canada CEO Tiff Macklem has indicated that if inflation continues to fall, we may see even more rate cuts.
Here’s a summary of the mortgage rate changes:
| Date | Rate | Change |
|---|---|---|
| 24th July 2024 | 4.5% | -0.25% |
| 5th June 2024 | 4.75% | -0.25% |
| 10th April 2024 | 5% | – |
| 6th March 2024 | 5% | – |
| 6th December 2023 | 5% | – |
| 7th June 2023 | 4.75% | +0.25% |
Provincial Breakdown
Mortgage rates and home sales can vary from province to province. Here’s how different areas of Canada are faring in 2024:
Ontario
Ontario saw a significant increase in home sales. In June 2024, residential listings rose to 39,164, up from 38,445 in April. Home sales in Ontario increased by 10.1%, showing a strong housing market driven by the lower mortgage rates.
British Columbia
In contrast, British Columbia saw a 19% decline in residential units sold. The province only recorded a 1% increase from the previous year, suggesting that the market may be cooling despite lower mortgage rates.
Alberta
Alberta experienced positive home sales growth with a 6.3% increase. The lower mortgage rates may be spurring more buyers to enter the market, especially in cities like Calgary and Edmonton.
Factors Affecting Mortgage Rates
Several factors influence mortgage rates, and understanding them can help you navigate the market better:
Inflation
As mentioned earlier, inflation has a direct impact on mortgage rates. When inflation rises, the Bank of Canada typically increases interest rates to keep the economy stable. Conversely, when inflation falls, interest rates and mortgage rates decrease, making borrowing more affordable.
Economic Growth
Canada’s economy grew by 1.5% in the first half of 2024, while the population increased by 3%. This indicates a supply-demand imbalance, with more homes being available than there are buyers, which can put downward pressure on housing prices.
Central Bank Policy
The Bank of Canada plays a crucial role in setting mortgage rates. The recent rate cuts are part of the central bank’s strategy to encourage borrowing and spending, which helps boost the economy.
Housing Market Trends
Mortgage rates also respond to housing demand. In markets where demand is high, rates may rise to cool down the market. Conversely, lower demand can lead to rate cuts to attract more buyers.
Upcoming Announcements
The Bank of Canada regularly announces changes to mortgage rates. Here are some key dates to watch for in 2024 and beyond:
| Date | Event |
|---|---|
| 4th September 2024 | Rate Announcement |
| 23rd October 2024 | Rate Announcement & Monetary Policy Report |
| 11th December 2024 | Rate Announcement |
| 29th January 2025 | Rate Announcement & Monetary Policy Report |
| 12th March 2025 | Rate Announcement |
These announcements will give more insight into future mortgage rate trends, so it’s important to stay updated.
The Canadian mortgage market in 2024 is trending in a favorable direction for buyers. With rates falling, now might be a good time to explore home ownership or refinance existing loans.
FAQs
When will mortgage rates be revised again?
The next rate announcement is on 4th September 2024.
How much have mortgage rates dropped in 2024?
Mortgage rates have dropped by 0.5% in 2024 so far.
What affects mortgage rates in Canada?
Inflation, economic growth, and central bank policies impact mortgage rates.
Are mortgage rates expected to drop further?
If inflation keeps declining, more rate cuts may follow.
Which province had the highest home sales in 2024?
Ontario saw a 10.1% increase in home sales, the highest growth.
