Photo: The Canadian Press

A worker rolls signs past the Bank of Canada, Wednesday, April 10, 2024 in Ottawa.

This is going to be the busiest December of Tracy Head’s career as a mortgage broker in the Okanagan.

Her business, Headstart Mortgage Architects, has been inundated with calls from clients in the wake of the latest Bank of Canada interest rate decision. On Wednesday, the bank announced it is cutting its prime rate by half a basis point to 3.25%.

The decision follows an earlier rate cut to 3.75% in October. That spurred a nearly 20% jump in real estate sales in the Interior in November, compared to the same month of 2023. This week’s drop is likely to help propel even more people into the market.

“I saw an uptick I would say starting about the second week of November, and for me personally, this is going to be the busiest December I’ve had, year-to-date career-wise,” said Head.

“What’s really exciting and reinforces what we’re seeing is I had a client list their home yesterday in Penticton and they had an accepted offer last night at asking price. So, I think more and more people that have been sitting on the sidelines waiting to get into the housing market are making those steps forward now.”

While the lower prime rate is a boon for those with variable mortgages, she says movement has been slower for fixed mortgages because they follow the bond market. Still, she feels the lower variable borrowing costs have created more interest and excitement for those getting into the market, especially in the $500,000 to $ 1 million price point.

“What I’m seeing with my own business is a lot of people that are making the move from, say, a starter home to a larger family home,’ said Head. That could free up starter homes for people who have been stuck in the overheated Okanagan rental market.

She’s bracing for another burst of activity when changes to federal mortgage policies take effect Dec. 15. The loosened rules will open up 30-year mortgages to even more Canadians.

“In August, the government rolled out a policy change where for some first-time homebuyers buying a new-built home, they could use a 30-year amortization. Next week they will be expanding it to existing homes as well. In addition, repeat buyers moving into a newly built home will be able to use a 30-year amortization.

“The biggest change I think for the Okanagan, that is generating some interest, is the ability to buy a home using an insured mortgage with a purchase price cap of $1.5 million instead of the $1 million that’s previously been in place.”

Head notes that while she encourages her clients to work within a 25-year amortization period, the reality is the 30-year option is opening the door to some who were previously unable to buy a home.

She says the rate drop is also a big sigh of relief for clients who are carrying variable mortgages and debt on their lines of credit, which fluctuate with the prime rate.

“All of these things combined, I hope, put more and more people into the position to get into the housing market in the Okanagan.”

Head contributes a regular mortgage-related column to Castanet.