With most lenders increasing their variable rate mortgage rates over the past several weeks leading up to this mornings announcement, it appeared as though they were expecting another cut to prime. At 10am this morning, the Bank of Canada announced that they will be maintaining the current overnight rate... meaning no changes to prime rate.
There were two cuts to prime rate earlier this year and banks have yet to match the full cut. The longer we can maintain stability in prime rate, the greater the chances are that the banks will eventually match the cuts...or at least cut it a little further. They definitely have room to do so, but are hanging on to the inflated rate to give them a little more security. We'll have to wait and see what happens.
For now, the prime rate remains 2.70%. You can get variable rate mortgages right now as low as prime -0.80% (1.90%). 5 year fixed rates remain as low as 2.44%.
There has not been an increase to prime rate since September 2010 which is the longest streak in history. Economists have been predicting that the prime rate will remain unchanged until sometime in 2016 and some even longer than that. I've heard predictions as long as 5 years. However... they have been predicting the prime rate will increase 'next year' every year for the past 5 years now.
You can read about the Bank of Canada's decision here:
http://www.bankofcanada.ca/2015/10/fad- ... 015-10-21/The next interest rate announcement will be on December 2nd 2015
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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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