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Making Sense of All the Rate-Hike Predictions – Cathy McMurrich


There’s been a lot of talk in the news lately about where mortgage rates are headed. 

We know the obvious direction from here is up, but what we don’t know is how high and how quickly. Nobody, not even the experts, can accurately predict this. But they try.

Scotiabank came out with a headline-grabbing forecast recently, saying it expects the Bank of Canada to deliver eight quarter-point hikes (totalling 200 basis points, or 2%) by the end of 2023. This would cause the prime rate to rise, likely by the same amount, which is used by banks and other lenders to price their variable-rate mortgages and Home Equity Lines of Credit (HELOCs).

Seeing predictions like this may be concerning to many borrowers. But keep in mind that few other experts share this outlook. For one, housing analyst Ben Rabidoux, President of Edge Realty Analytics, says the fear of rate hikes is overblown, and that eight hikes in the next two years is close to a “pipe dream.” 

To keep things in perspective, the other big banks expect anywhere between one and three Bank of Canada rate hikes by the end of 2023.


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