Once again no change for variable rate mortgage holders as key policy rate holds steady
The Bank of Canada announced today that it is keeping the overnight rate unchanged, although with a stronger economic outlook hinting that it may become necessary to increase rates, but noting that this decision will be "weighted carefully against domestic and global economic developments."
The Bank's statement was more optimistic than in recent announcements, saying "the profile for global economic growth has improved" and that "economic momentum in Canada is slightly firmer than the Bank had expected in January". With respect to the possibility of a rate increase, they note that "in light of the reduced slack in the economy and firmer underlying inflation, some modest withdrawal of the present considerable monetary policy stimulus may become appropriate."
The prime rate for most lenders should stay at 3%. The Bank's next rate decision is scheduled for June 5.
Spring market 2012 is benefiting from historically low 5 and 10-year fixed rates, which are not based on the overnight rate. Mortgage rates have been hovering around historic lows now for longer than almost anyone thought they would or could, creating a golden moment of opportunity for both first-time buyers and existing homeowners.
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