With weaker outlooks for Europe and the U.S., the Bank of Canada announced earlier today that it is keeping its key policy rate steady, exactly where it's been since September 2010, which makes this the longest recorded rate pause.
In its statement the Bank noted that "the recession in Europe is now expected to be deeper and longer than the Bank had anticipated", and that the "U.S. recovery will proceed at a more modest pace going forward." The Bank noted that while the Canadian economy "had more momentum than anticipated in the second half of 2011, the pace of growth going forward is expected to be more modest than previously envisaged, largely due to the external environment."
The prime rate at most lenders will stay at 3.00%, which means those with variable-rate mortgages will not see their payments change and will continue to enjoy historically low rates. New variable rate mortgages are available to qualified borrowers at Prime minus 0.10%.
The Bank's next rate decision is scheduled for March 8.
And while not related to the prime rate, it is worth noting that fixed mortgage rates are near all-time lows, with 4 and 5 year mortgages available at rates that are close to variable-rate pricing.
If you would like to review your options, please let me know.
Rick Moran, AMP #M08001997
Showing posts with label bank of canada. Show all posts
Showing posts with label bank of canada. Show all posts
Wednesday, January 18, 2012
Tuesday, December 7, 2010
BANK OF CANADA KEEPS KEY RATE UNCHANGED
The Bank of Canada said today that it will leave its key interest rate unchanged. In its statement this morning the Bank pointed to risks to a rebound in Canadian exports based on “a combination of disappointing productivity performance and persistent strength in the Canadian dollar.”
The Bank stated that keeping its key rate steady “leaves considerable money stimulus in place, consistent with achieving the 2 per cent inflation target in an environment of significant excess supply in Canada,” and that any further increases “would need to be carefully considered.”
Earlier this year, the Bank had raised its key interest rate three times since June, but it also kept borrowing costs steady on October 19, noting some uncertainties in the economic outlook and continuing weakness in the U.S. economy.
Today’s Bank of Canada announcement means that Canadian lenders are expected to keep their prime lending rate steady. Products typically linked to a lender’s prime rate include variable-rate mortgages, variable-rate credit cards, and home equity lines of credit. The pricing of fixed-rate mortgages, on the other hand, is more affected by trends in the bond markets.
In the U.S. Ben Bernanke is investing $600 million in government bonds that he believes will provide an injection directly into the U.S. economy. Correct or not, this indicates to me that the U.S. prime rates are unlikely to move anywhere in the near future.
Rick Moran, AMP, OMB # M08001997
The Bank stated that keeping its key rate steady “leaves considerable money stimulus in place, consistent with achieving the 2 per cent inflation target in an environment of significant excess supply in Canada,” and that any further increases “would need to be carefully considered.”
Earlier this year, the Bank had raised its key interest rate three times since June, but it also kept borrowing costs steady on October 19, noting some uncertainties in the economic outlook and continuing weakness in the U.S. economy.
Today’s Bank of Canada announcement means that Canadian lenders are expected to keep their prime lending rate steady. Products typically linked to a lender’s prime rate include variable-rate mortgages, variable-rate credit cards, and home equity lines of credit. The pricing of fixed-rate mortgages, on the other hand, is more affected by trends in the bond markets.
In the U.S. Ben Bernanke is investing $600 million in government bonds that he believes will provide an injection directly into the U.S. economy. Correct or not, this indicates to me that the U.S. prime rates are unlikely to move anywhere in the near future.
Rick Moran, AMP, OMB # M08001997
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