Bank of Canada Leaves Key Interest Rate Unchanged

The Bank of Canada announced this morning that it will leave its key interest rate unchanged, as anticipated by most economists.

In its statement the Bank commented that its current key policy rate “is consistent with achieving the inflation target over the medium term.” The Bank forecasts that the Canadian economy will grow by “2.6 per cent in 2007, 2.3 per cent in 2008, and 2.5 per cent in 2009,” and that inflation will “return to 2 per cent in the second half of 2008.”

As a result of this decision, lending institutions in Canada are expected to keep their prime lending rate steady. However, people looking for a new variable-rate mortgage should note a recent mortgage rate trend – pricing on this type of mortgage has been adjusting upwards in recent weeks. Existing variable rate mortgages do remain unchanged but new variable borrowers are paying more.

If you would like to discuss how current trends in mortgage rates impact the best mortgage strategy for you, contact me at (604) 506-0397. I can obtain a mortgage pre-approval if you’re wanting to buy a home – with a “rate hold” of up to 120 days, you will know how much you can afford.