HomeLoansHomebuyers in Canada bet on more rate cuts with adjustable loans

Homebuyers in Canada bet on more rate cuts with adjustable loans

Canadian homebuyers are increasingly opting for variable-rate mortgages as expectations build that policymakers are about to provide further relief on borrowing costs.

The share of borrowers opting for mortgages that track the Bank of Canada’s benchmark rate rose to 12.9 per cent in the first quarter, the second consecutive increase, according to new data from the central bank. That’s up from a low of just 4.2 per cent of new mortgages in the third quarter of 2023 — though it’s still well below the levels seen in the pandemic, when such floating-rate loans briefly became the majority of the market. 

The change in borrower preferences began even before the central bank cut its policy interest rate earlier this month and signaled more cuts to come. 

With the benchmark rate now at 4.75 per cent, economists say that slowing economic growth and cooling inflation will…

Read more at www.bnnbloomberg.ca

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