Rate Interest Forecast 2023 to 2028

 

Summary (updated April 2023)

• The prime rate in Canada as of April 12, 2023 is 6.7%. (last change: +0.25% on January 26, 2023)
• On Wednesday, April 12th, 2023, The Bank of Canada announced that it will hold the key interest rate at 4.50% and will be continuing their pause on rate hikes for the near future while they look closely at the economy to determine future policy.
• The continued pause on rate hikes was largely predicted by Canada’s economists.
• With news of the Silicon Valley Bank failure, bond yields (which influence fixed mortgage rates) dipped significantly. However, the market has now stabilized.
• Bank economists believe that there will be no more rate hikes for the rest of the year and to possibly expect rate cuts in 2024.

2023 Predictions (updated for Spring 2023)

• Expectations that rate hikes are done for the remainder of the year look all but certain at this point. We look forward to seeing if the projected rate cuts in late 2023 will materialize.
• We predict fixed rates will lower in April, with variable rates remaining steady.
• When interest rates eventually come down again it’s likely the increased demand will bring the housing market back to where it was pre 2022. If you go with a variable rate you could have the best of both worlds when rates come back down, or you could play it safe and go with a fixed rate mortgage.

	Variable Rate Interest Forecast 2023 to 2028 (as of May 2023)
Date	5-year variable rates
2023-06-30	5.86%
2023-12-31	5.45%
2024-06-30	4.79%
2024-12-31	4.17%
2025-06-30	4.09%
2025-12-31	3.71%
2026-06-30	3.67%
2026-12-31	3.39%
2027-06-30	3.62%
2027-12-31	3.46%
2028-06-30	3.81%
2028-12-31	3.74%