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PostPosted: Wed Jul 12, 2017 9:41 am 

Joined: Fri Feb 01, 2008 2:35 pm
Posts: 527
As many were anticipating, the Bank of Canada announced that they will be increasing their overnight rate, which is the prime rate is based on. The announcement came at 10am this morning. July 12th.

There was plenty of warning from the Bank of Canada, and this is exactly what we were expecting. Following this mornings announcement, bond yields have increased just slightly, but nothing out of the ordinary. Just typical market movement. No major spike after the announcement, which is good news for anyone currently in the market for a fixed rate.

The prime rate is currently 2.70%... for now. Banks will soon announce their increases to their prime rates, which will come within the next couple of days. The non-bank lenders will then follow. The question is, just how much will they increase prime? The last two times the Bank of Canada lower the overnight rate, the big banks did not match the full 0.25% discount, which was unprecedented. They only lowered their prime rate by 0.15%. Banks certainly love the opportunity to make more money, so it wouldn't surprise me in the least if they didn't match the full increase. We'll know soon enough.

You can read the full announcement here: http://www.bankofcanada.ca/2017/07/fad- ... 017-07-12/

The next interest rate announcement will be on September 6th, 2017.

Paul Meredith
Mortgage Broker
CityCan Financial (est 1976)

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

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