This is from the desk of Peter Puzzo, Mortgage Agent, Assured Mortgage Services. Peter works out of our Orangeville office, great guy and he does a fabulous job with your money.

"I hope all is well. As expected , the Bank of Canada announced on Tuesday that the overnight lending rate would remain unchanged. As a result all major banks will keep their prime lending rate at 3% and in turn your variable mortgage will maintain its current rate.

The Bank of Canada emphasized some very important points in their announcement. The Canadian dollar (trading at $1.035 US this morning) has gained some additional ground since the last BofC meeting, putting additional pressure on our exporters. This strong dollar is primarily due to the increase in the price of oil, thanks to strong demand in emerging markets and geopolitical factors (for example what is taking place in Libya, reduce supply results in higher prices). If our exporters have this competitive disadvantage in place it obviously hurts economic productivity. Second, core inflation is well under the BofC’s target of 2%. Remember if inflation increases the bank needs to increase interest rates to discourage us from borrowing more funds and thus spending more. Last but certainly not least, the BofC sees the economy running at full capacity in the middle of 2012.

   In short, many economists believe the Bank of Canada will not increase rates until this summer at the earliest."