This morning the Bank of Canada reduced it’s overnight bank rate to 0.75%, from 1.0%, where it had been since September 2010.
The news caught most Analysts by surprise because they thought the Bank of Canada would wait a little longer to see what happens with the falling oil prices before making a rate announcement.
It is important to note that the Bond Markets (which determines how fixed rates are set) was already very low and thus this surprise announcement had an immediate impact on the bonds, pushing them down. If this trend continues we anticipate that fixed rates for mortgage will drop in the near future.
The Prime rate, which affects Variable Rate Mortgage (VRMs or ARMs) and Lines of Credit (Loc) has not changed yet and remains at 3.00%. Within the next few days it is possible that the Prime rate will be decreased by the 0.25% and the banks and mortgage companies will decrease their rate as well.
With today’s news, the likelihood of the Prime rate moving upwards in the third quarter of 2015 as once reported by most Analysts, is unlikely to happen. All (100%) of Bloomberg’s Analysts went on the record to predict another 0.25% rate cut in March 2015.
To learn more about how this announcement might have affected your mortgage or line of credit, please feel comfortable calling me.
If you are considering buying a home or refinancing your current mortgage please contact me and I will be sure to help you create a strategy that saves you money.
Talk to you soon,
Karen Boies 604-726-9550 or firstname.lastname@example.org