Is Canada headed for a recession? All eyes look to second quarter economic data for clues – and whether the Bank of Canada will cut rates again for the second time this year. The recent numbers aren’t economically encouraging, as both energy and non-energy sectors disappoint, adding increased pressure for the BoC to make a stimulus move. Our panel anticipates another 0.25 per cent cut in the upcoming July announcement, while low bond yields hold fixed rate discounts at status quo.
Fixed Mortgage Rates: Unchanged
Fixed mortgage rates have been very competitively priced, with some of the lowest offerings in the 2.30 per cent range. This discounting has been supported by a consistent demand for Government of Canada bonds, as investors flock to safe haven options amid Greek and Chinese economic drama. It’s not expected that lenders will change their discounting tactics in the short term.
Variable Mortgage Rates: Down
The odds that the Bank of Canada will cut central rates this month are increasingly likely, as economic data fails to reflect any of the anticipated Q2 recovery called for early in the year. RateSupermarket.ca’s experts call for a quarter-of-a-percentage cut to the Overnight Lending Rate in the next Bank of Canada rate announcement, with additional downward pressure on Prime and the variable cost of borrowing.
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