Hope you are keeping warm from this brutal winter!
The Bank of Canada has recently released information pertaining to its variable rates to stay low for the next year. They announced the following:
- Key lending rate will stay at 75 basis points above its all time low
- suggested its next move is likely to be a rate cut as a rate hike
- inflation will not rise back to its ‘target’ for approximately another 2 years time [this means the chances of Prime to increase between now and 2015 is unlikely]
Even if we hypothetically say inflation meets it target of 2%, that factor by itself is not reason enough for the Bank of Canada to rise rates. In short, this means variable rate borrowers are at an all time advantage. For a rate increase to actually occur, it would take 2-3 months of a weak economy (ie. falling exports, business investments, inflation, or employment).
Economists do not feel we are in for Prime to increase any time soon, based on current conditions.
Hope this update was informative.
Have a great rest of the week everybody!
Contact Robert Clancy today for all your mortgage needs! 416-899-1467.