Mark Carney at the Bank of Canada left it's key interest rate at the same very low level of 1% for the 12 consecutive time. This hasn't happened since the 1950's! This key interest rate is also referred to as the Prime rate and is what many lending facilities including Variable rate mortgages are affected by. Financial Institutions Prime rate is usually 2% higher than the Bank of Canada. So current Prime rate at most Canadian Banks is still 3%.
This is good news for borrowers as it keeps interest costs and payments low. Mr. Carney did, however, note that borrowing costs could rise sooner than expected and stressed that signs that the Canadian as well as economies abroad are showing stronger signs of improvement since the bank's last meeting. Leading economists were predicting that this key lending rate might hold steady until the middle of next year. That may now have to be moved up as the economies, here and abroad, start to stand on more solid footing.
Talk to your Mortgage Advisor on what, if any, impacts this could have on you. Whether or not it makes sense to take a fixed or variable rate mortgage or maybe a little of both.
Tony Marchigiano | Mortgage Specialist | RBC Royal Bank | Royal Bank of Canada | T. 604-505-7109