They say that to turn the economy is like trying to turn a giant cruise liner.

You make a change in direction in the cockpit, but it takes a very long time for those changes to be felt by the ship

The "rate rampage" that the BoC went on from March '22 to July '23 is being felt now.

* Inflation is DOWN to 2.7% (from 8.1%)
* Unemployment is UP to 6.4% - over 1% higher than this time last year
* Retail spending is Way DOWN - dropping another 0.8% in June
* GDP Per Capita (which factors in the increase in population) has been NEGATIVE 6 out of the last 7 quarters.

While the BoC increased rates in leaps as high at 1% at a time, on the way down, most expect smaller steps of 0.25% - like we have seen at the last 2 meetings.

Many economists are predicting another 0.50% total drop by the end of this year.

As this relates to affordability, generally a 1% rate drop translates to a 10% increase in mortgage borrowing power.

That means that, if at the start of the year, you qualified for a variable rate mortgage of $800K, today with rates currently 0.50% lower, you now qualify for approx $840K

‍And if we get another 0.50% by years end, you will qualify for approx $880K  

If you already have a mortgage, and want to know how these changes will impact you, please reach out - especially if you have a renewal coming up in the next year.