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PostPosted: Wed Sep 07, 2016 9:18 am 

Joined: Fri Feb 01, 2008 2:35 pm
Posts: 527
As we approach the fall season after an amazing summer, the chances of another cut to prime rate continue to dwindle. Once again, 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. (Sept 7th). Exactly what was expected so no big surprise here.

For now, the prime rate remains 2.70%.

We are now starting to see larger discounts on variable rate mortgages with the lowest rates being around prime -0.65% (2.05%). While this is a decent discount off prime, considering you can get a 3 year fixed for close to the same cost as variable, it's hard to justify going variable these days. A single increase to prime rate, and already you'd be paying more. For this reason, fixed rates are now more attractive and more popular than ever.

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 which have declined steeply since the beginning of the year.

You can read the full announcement here: http://www.bankofcanada.ca/2016/09/fad- ... 016-09-07/

The next interest rate announcement will be on October 19th, 2016

Paul Meredith
Mortgage Broker
CityCan Financial (est 1976)

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

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