(780) 455-8518 josh@mortgagesforless.ca

The Bank of Canada’s overnight rate of 1.75% remains unchanged as of the Bank’s announcement yesterday.

After multiple recent hikes some expected the rates to keep going up. But the Bank decided to stand pat. “The global economic expansion is moderating largely as expected,” they said, “but signs are emerging that trade conflicts are weighing more heavily on global demand… [and] there are upside as well as downside risks around trade policy.” In layman’s terms, no one knows what is coming next.

The overnight rate is specifically important to home owners because the PRIME rate, which is 3.95% today, moves in tandem with it. When rates are stable and are expected to stay that way your mortgage broker will tell you it’s a good time to look into switching to a variable-rate mortgage.

The common consensus among economists last month was that the Bank would not increase their interest rates; and they were right. Once again, financial professionals expect rates to stay the same. In response to the Bank’s announcement, Scotiabank economist Derek Holt said, “Looking ahead to January, the [Bank of Canada] will likely need to be convinced to hike (rather than not to hike), so we’ll need to see a solid run of data and oil prices at a minimum hanging in there.”

After so many consecutive rate hikes, can we really expect this new flat line to keep going? For the time being, yes we can. The Bank changes it’s rates based on economic developments across the country as well as around the world. Brian DePratto, TD Bank Analyst, doesn’t think it’s likely we’ll see any changes. “We no longer expect the Bank of Canada to hike its policy interest rate in January,” he said. “Spring 2019 now appears to be the more likely timing, allowing for the Bank to ensure that the growth narrative is back on track.”

For more information on PRIME rate and your mortgage, please contact me, Josh, at 403-241-3255