At 9:00 am EST, September 7th, 2011, the Bank of Canada did what we expected them to do… they maintained their overnight rate.  What this means to you is that the prime rate on your mortgage or line of credit will not change and remains at 3.00%.  This is great news as you still have a great low rate and so continue to make the most of the low payments

Here is an excerpt of the announcement from the Bank of Canada and what they had to say about their decision:

“The global economic outlook has deteriorated in recent weeks as several downside risks have been realized. The European sovereign debt crisis has intensified, a broad range of data has signalled slower global growth, and financial market volatility has increased sharply. Recent benchmark revisions show that the U.S. recession was deeper and its recovery has been shallower than previously reported.   Canadian net exports are now expected to remain a major source of weakness, reflecting more modest global demand and ongoing competitiveness challenges, in particular the persistent strength of the Canadian dollar.”

April 12

May 31

July 19

September 7

October 25

December 6  

As suspected rates have held steady this morning, meaning no change to variable rate mortgages or lines of credit with the current payments. Fixed interest rates (which are tied to the bond market) have been on the rise over the last week on average 30 basis points.  With a strong Canadian dollar, low inflation levels and an election imminent, it’s almost certain that the Bank of Canada will wait until later in the year to raise interest rates. While time is taken to digest the results of the election, watch for variable rate mortgages to remain mostly unchanged during this period.

An anticipated increase in Government of Canada bond yields due to improving economic conditions and higher inflation should eventually lead to higher fixed rates by the end of the year. Vist our "Mortgage Broker" page for more information !