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PostPosted: Wed Apr 13, 2016 9:18 am 

Joined: Fri Feb 01, 2008 2:35 pm
Posts: 527
Earlier this year, there were predictions that the prime rate would drop again before spring. Well.... spring is here, the flowers are blooming and we are wearing lighter clothing. Okay, maybe not quite yet, but I like to stay positive! However, no drop to prime rate.

The Bank of Canada announced this morning that they will be maintaining their overnight rate, which is the rate prime is based on. The announcement came at 10am this morning. (April 13th, 2016).

One of the key reasons for their decision this morning is due to their expectations that global growth will continue throughout the year and into the next. The Canadian dollar has also strengthened (although if you take a trip to the US, you may start to question that when you get your credit card bill). Providing this economic growth continues, I wouldn't expect to see another drop to prime rate any time soon.

For now, the prime rate remains 2.70%.

5 year variable rates are now as low as 2.10% (Prime -0.60%) with most major banks being around prime -0.25%... a pretty big gap.

Prime rate and fixed mortgage rates are unrelated. While variable rate mortgages and lines of credit are affected by prime rate, fixed mortgage rates are determined by bond yields. The yields are up sharply since last week, but still not enough to put any upward pressure on fixed mortgage rates. At least.....not for now. You can follow the bond yields yourself here: http://www.investing.com/rates-bonds/ca ... bond-yield

5 year fixed rates are now as low as 2.39% for high ratio purchases (CMHC insured) or 2.44% for conventional mortgages (20% down payment / equity or more).

You can read the full report from the Bank of Canada here: http://www.bankofcanada.ca/2016/04/fad- ... 016-04-13/

The next interest rate announcement will be on May 25th, 2016

Paul Meredith
Mortgage Broker
CityCan Financial (est 1976)

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

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