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PostPosted: Wed Oct 25, 2017 10:13 am 

Joined: Fri Feb 01, 2008 2:35 pm
Posts: 527
The Bank of Canada announced this morning that they will be maintaining their overnight right, which is what prime rate is based off of. This means that prime rate will remain unchanged. It has been widely predicted that there will be one more rate increase before the end of the year, which could have come as soon as today. Fortunately, that wasn't the case.

Back in 2010, we saw three rate hikes in a row, which is not something that will be repeating in 2017. These three rate hikes were the last increases we would see until the middle of 2017... almost 7 full years later. As mentioned, it's still expected that there could be another increase, however we'll have to wait and see what happens.

The prime rate remains at 3.20%

These interest rate announcements typically only affect variable rate mortgages, however they can have an indirect influence on fixed rates as well. Fixed rates are primarily determined by bond yields, which a rate announcement can have an impact on, which would then in turn have an impact on fixed rates. The bond yields have been fairly stable since mid-September. This mornings announcement could very likely start pushing them downwards, which could lead to lower fixed rates.

You can follow the bond yields here: https://www.investing.com/rates-bonds/c ... bond-yield

Discounts on variable rate mortgages have now increased to as low as prime -1.15% (2.05%). This is the largest discount we have seen on variable rates mortgages is over 10 years. As with most of the lower rates these days, this is for high ratio purchases or switches only. Meaning, purchases with LESS than 20% down payment or switches where your original purchase was made with less than 20% down.

You can read the full announcement here:
https://www.bankofcanada.ca/2017/10/fad ... 017-10-25/

The next interest rate announcement will be on December 6th, which will be the last announcement of the year.

Paul Meredith
Mortgage Broker
CityCan Financial (est 1976)

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

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