The Bank of Canada announced today that they’re holding interest rates steady with their target for the overnight rate at 0.25%.
The central bank reported that all information received since their last rate announcement in April is consistent with their outlook for economic performance and inflation, therefore, no action was needed. They expect the global and Canadian recovery to be more “muted” than usual, and continue to believe that the target overnight rate will stay at it’s current level until the second quarter of 2010.
In terms of mortgages, that means that variable mortgage rates should not increase significantly until next year, as these are influenced by mortgage lenders cost of borrowing. This is very different to fixed mortgage rates, which are based on long term bond yields, and have increased by an average of 0.20% this week.
As a result, it may be time to lock in and get pre-approved if you’re interested in a fixed mortgage rate. You can go compare mortgage rates now to see how things have changed this week.