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PostPosted: Wed May 30, 2018 10:08 am 
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Joined: Fri Feb 01, 2008 2:35 pm
Posts: 525
The Bank of Canada announced this morning that they will be maintaining their overnight rate, which means no change to prime rate. The announcement came at 10am this morning, May 30th, 2018.

Prime rate will remain at 3.45%.

The Bank of Canada wants to increase prime rate, however this likely won't happen until the next announcement on July 11th. The overall economy has been strengthening, although the housing market still remains a little soft. That's a good thing though, considering the ridiculousness of the Toronto and Vancouver housing markets over the last few years in particular, which was not sustainable.

Bond yields have been dropping and are now at their lowest levels since mid-April. Although up sharply today surprisingly, the upward trend has reversed which puts downward pressure on fixed mortgage rates. We should see a drop in fixed rates soon.

You can follow the bond yields here: https://www.investing.com/rates-bonds/c ... bond-yield.

While it's always possible that the prime rate could decrease, I would say that is not likely in the near future. But of course, anything can happen and the BOC has shocked us before.

The deepest discount on variable rate mortgages right now is prime -1.29% (2.16%). This rate however is only available to those with 35% or greater equity / down payment. Property value must be under $1 million (or at least must have been under $1 million at time of purchase).

Lowest 5 year fixed rates have now increased to 3.24% with market rates now at 3.74%. Again, for lowest rates your mortgage needs to either be insured by CMHC, or have at least 35% equity with a property value under $1 million.

Given the large discount on variable rate mortgages, variable is an extremely attractive option right now.... even with predictions of further rate increases, there is plenty of cushion against rising rates, which represents a big opportunity for savings.

You can read this mornings full announcement here:
https://www.bankofcanada.ca/2018/05/fad ... 018-05-30/

The next interest rate announcement will be on July 11, 2018.

_________________
Paul Meredith
Mortgage Broker
CityCan Financial (est 1976)
416-409-8009
http://www.easy123mortgage.ca
paulm@citycan.com
Lic#10532

Follow me on Twitter! http://www.twitter.com/paulmeredith


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