Bank of Canada Rate Update!!!

down-paymentBank of Canada maintains overnight rate.

Yet again, the Bank of Canada has opted to keep the target for the overnight rate steady at ½ percent-meaning variable rate mortgages won’t be moving any time soon.

The Bank attributed it’s move (or lack thereof) to weaker-than-expected global economic growth and uncertainty surrounding China’s transition to a slower growth path (which is putting downward pressure on energy prices). The US economy, on the other hand, is continuing to pick up steam-which is good news for Canadian exports.

Canada’s economy has rebounded from the recession we were experiencing earlier this year. Non-resource sectors are benefiting from previous monetary policy actions and depreciation of the Canadian dollar, the Bank says. Households are continuing to spend at a moderate pace. Lower prices for oil and other commodities, however, are dampening business investments and exports in the resource sector.

It’s these lower oil and commodity prices that are causing the Bank to revise its economic growth forecast for 2016 and 2017. Now, the Bank projects real GDP will grow by just 1% in 2015 before firming to about 2% in 2016 and 2.5% in 2017. The Bank is now saying the Canadian economy will return to full capacity by mid-2017.

If you have any questions about your variable rate mortgage-or even your fixed-rate mortgage-please don’t hesitate to reach out to me.


Bank of Canada Rate Update

Good news for variable clients and those with lines of credit.

NewHome_150Bank of Canada maintains overnight rate!

Despite global economic uncertainty fuelled by the situation in China, the Bank of Canada is opting to maintain it’s target for the overnight rate at 0.5% this month-although some economists believe another rate cut may still be in the cards later this year.

With total CPI inflation within the target range (albeit near the bottom), and core inflation close to 2%, the Bank believes the current stance on monetary policy is appropriate to keep it in check. And while Canada’s resource sector is still adjusting to lower oil and commodity prices, spillover to the rest of the economy is minimal with household spending and a solid US recovery picking up the slack.

Many believe the Bank’s rate announcement was positive, overall, and while another rate cut this year was highly possible just a few short weeks ago, it’s by no means a certainty. But then again, when is a rate change ever a sure thing? As always, only time will tell. In the meantime, keep paying a little extra on your variable rate mortgage-and tune in on October 21 to find out the Bank’s next rate decision.