Interest rates are expected to decrease; it's just a matter of when and by how much. The recent Consumer Price Index (CPI) print at 2.7% indicates that the Bank of Canada is making modest progress toward its inflation rate target. There is a consensus among the five major banks that rate cuts will occur between June and July of this year. However, much can happen between now and then that could influence the Bank of Canada's decision. The bank is cautious, aiming to avoid any policies that could reignite inflation.

This caution is warranted, yet several key metrics suggest that rate cuts will be necessary to manage the substantial volume of mortgage renewals occurring between now and 2026. My educated guess is that we might see rate reductions around the fall of 2024 to early 2025 though I hope for earlier relief for Canadians. Additionally, it is crucial to consider whether the impending cuts will be substantial enough to make a meaningful impact.

John Chrisanthidis, Mortgage Broker (FSCO Lic. M08001294 Mortgage Intelligence FSCO Lic. 10428)

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