ATTENTION ANYONE WHO HAS DEBT!! As you know, your variable rate mortgage, lines of credit and/or student loans are all based on the Prime Rate and as promised, here is your personal update from me on the recent Bank of Canada announcement on changes to their Overnight Rate which in most cases impacts your Prime Rate. At 10:00 am EST, Wednesday October 22nd, 2014 the Bank of Canada again did what we expected them to do ... they continue to maintain their overnight rate and in fact are not likely to make any change until possibly 2016 now! So to continue with the Bank of Canada news, here is an excerpt of the announcement and what they had to say about their decision today: Although the outlook remains for stronger momentum in the global economy in 2015 and 2016, the profile is weaker than in July and growth prospects are diverging across regions. Persistent headwinds continue to buffet most economies and growth remains reliant on exceptional policy stimulus. Against a background of ongoing geopolitical uncertainties and lower confidence, energy prices have declined and there has been a significant correction in global financial markets, resulting in lower government bond yields. Despite weakness elsewhere, the U.S. economy is gaining traction, particularly in sectors that are beneficial to Canadas export prospects. The U.S. dollar has strengthened against other major currencies, including the Canadian dollar. In this context, Canadas exports have begun to respond. However, business investment remains weak. Meanwhile, the housing market and consumer spending are showing renewed vigour and auto sales have reached record highs, all fuelled by very low borrowing rates. The lower terms of trade will have a tempering effect on income The Bank still feels that they wont consider increasing rates to as far out as 2016! They continue to wait and see economic growth continue on a more upward direction and sustainable long term. Remember, that any increase to the prime rate since 1992 has only been by 0.25% at any ONE time, so you wont see a large significant increase all at once. Fixed rates havent changed much at all since the last announcement and are around 2.99% to 3.09% for a five year fixed term. Based on this recent announcement, and the anticipation that the prime rate will still remain low for a while now, unless you feel otherwise, Id recommend that you remain with your current variable rate product as the interest is lower than a fixed term rate right now. However, if having a fixed payment is important to you, call your Mortgage Advisor so they can calculate what your new payment would look like and also if it is suitable for you. The next announcement on any change to the prime rate is December 3rd, 2014.
Posted on: Wed, 22 Oct 2014 19:41:13 +0000
Recently Viewed Topics
© 2015