As expected , the Bank of Canada announced on Tuesday that there would be no change in their overnight lending rate. As a result all banks will maintain a prime lending rate of 3.00% and thus no change in your variable mortgage rate.
More interestingly, the Bank of Canada emphasized that the global economy is weakening at a greater pace than expected with obvious problems coming out of the Euro zone (see Greece, Italy etc). Though a resolution to the European debt crisis is expected in the coming days, it doesn’t change the economic realities currently in place.
Canada, as has been the case over the past couple of years is still experiencing reasonable economic growth despite events taking place globally. The Bank of Canada expects modest growth in 2012 and sees no immediate threat where inflation is concerned. In addition, a strong Canadian dollar will continue to hamper our net exports.
In short, I do not expect any change in variable rates over the coming months. Global economic uncertainty will reign and variable mortgage clients in Canada will continue to enjoy historically low rates. Should you have any friends, family or co-workers interested in mortgage consultation please feel free to pass on my contact information. Thank you for your support in advance and my next update will come shortly after the Bank of Canada’s meeting on December 6th.