The latest rate announcement came this morning from the Bank of Canada with no changes since September 2010. This was the first rate announcement since Stephen Poloz replaced Mark Carney as the bank governor at the beginning of June.
The economic forecast for Canada is expected to be choppy in the short term. GDP forecasts are unchanged projecting 1.8% for 2013 and 2.7% for 2014 and 2015.
It appears the Bank of Canada is in no hurry to increase rates until it sees signs of significant and steady growth in the Canadian economy.
What does this mean for mortgage rates? Variable and adjustable rate mortgages and Home Equity Lines of Credit (HELOC) will remain unchanged and appear to be a great option as the spread between fixed rates has grown significantly over the past couple months. Today the best variable rate and best 5 year fixed rate are approximately .70% apart with variable rate mortgage coming in around 2.50% to 2.60%. There doesn’t appear to be any immediate risk of rate increases for those holding these products.
The next rate announcement will come on September 4, 2013.
