Once again, no big surprise at all that the The Bank of Canada once again maintains it's overnight rate following their first interest rate announcement of 2014 which came at 10:00am this morning (March 5th, 2014). The rate has been unchanged now since September 2010 adding to the longest unchanged streak since the 1950's. This means the prime rate remains unchanged at 3.00%. Economists have been predicting that the prime rate will remain unchanged until sometime in 2016. This is great news for anyone with variable rate mortgages as it means no increase to rate or payments.
Here is an excerpt from the announcement made by the Bank of Canada and what they had to say about their decision:
"In Canada, economic growth in the fourth quarter of 2013 was slightly stronger than the Bank anticipated, and upward revisions earlier in the year further raised the level of GDP. The Bank still expects underlying growth of around 2 1/2 per cent in 2014, with the current quarter likely to be softer. Exports have been a little stronger than previously thought but continue to underperform, and overall business investment has yet to pick up. Meanwhile, recent data support the Bank's expectation of a soft landing in the housing market and stabilizing debt-to-income ratios for households.."
Lots of good news about growth. It makes note of a 'soft landing', but that is expected and is just part of the cyclical movement in the housing market.
This decision doesn't affect fixed mortgage rates, which are starting to trend back down once again. While variable rate mortgages and lines of credit are affected by prime rate, fixed mortgage rates are determined by bond yields which after a short period of trending downward are up in the past two days. Some lenders have dropped rates recently, but I would still say they are volatile.
You can now get a 5 year fixed mortgage for as low as 2.99% once again, which is a significant discount over commonplace market rates of 3.29%. Don't over pay! It's so easy to do so! Another option to look at is a 3 year at 2.59% which will save you thousands of dollars over that period. While these rates may even sound high due to where they were over the past year, they are still extremely low by historical standards.
We are now starting to see deeper discounts to variable rate causing it to become popular once again. You can now get a variable rate for as low as prime -0.65%. It may also be a great time to consolidate any higher interest debt into your mortgage to take advantage of such low rates and lowering your overall monthly payment and amount of interest you are paying significantly.
You can read about the Bank of Canada's decision here:
http://www.bankofcanada.ca/2014/03/publ ... 014-03-05/The next interest rate announcement will be on April 16th, 2014
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Paul Meredith
Mortgage Broker
CityCan Financial (est 1976)
416-409-8009
http://www.easy123mortgage.capaulm@citycan.comLic#10532
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