Mike Carson

Your local Sunshine Coast Realtor

Cell 604-740-1841

Office (24 hour pager) (888) 385-3295

Email: info@sunshinecoastland.com

Bank of Canada Holds Interest Rate Steady

The Bank of Canada held its overnight rate target steady at ½% this morning, quelling rumours that it might go even lower.   This is the rate at which banks borrow their money from the Bank of Canada, and usually has a trickle-down effect on mortgage rates.   However, as of late banks have been acting independently of the Bank of Canada and all the major players have raised rates incrementally recently, although not enough to dampen the market.  The reasons given, if any, include loss of revenue due to extremely low margins, and the ever more stringent legislation, rules and regulations designed to keep our banking system safe.  Rates are still at historical lows, however, and economists warn that home buyers should be aware that they will rise eventually and to make sure they can afford slightly higher payments if/when rates do go up.  Lower variable rates may seem tempting but locking in now for as long as possible is still a good strategy for the risk averse.

The Bank of Canada cited several factors for maintaining the current rate:

  • Inflation in Canada is evolving broadly as expected;
  • The dynamics of the global economy are broadly as anticipated;
  • Prices for oil and other commodities have declined further and this represents a setback for the Canadian economy;
  • National employment remains resilient despite job losses in the resource sector and household spending continues to expand. 

The Bank projects Canada’s economy will grow by about 1 1/2 per cent in 2016 and 2 1/2 per cent in 2017.
Read the full Bank of Canada announcement here:    Bank of Canada Press Release

 

Access the Bank of Canada Monetary Policy Report for January 2016 here:  Bank of Canada Monetary Policy Report - January 2016

 

Comments:
No comments

Post Your Comment: