Bank of Canada Leaves Overnight Lending Rate Unchanged

Bank of Canada holds rates steady

Slower-than-predicted global economic growth and historically low oil and commodity prices are largely to blame for the Bank of Canada's decision to maintain the target for the overnight rate at 0.5%-which is, yet again, good news for variable rate mortgage holders.

The Bank now predicts the global economy to strengthen gradually from about 3% in 2016 to 3.5% in 2017-2018-which is weaker than the bank had projected back in January. The US economy, in particular, is expected to regain momentum at a "lower profile"-which the Bank believes will be less favourable for Canadian exports.

When it comes to the Canadian economy, prices of oil and other commodities are off their earlier lows-and are actually slightly above the Bank's January predictions-but they're still well below historical averages. Canadian consumers-particularly those that enjoy cross-border shopping-can look forward to a dollar that's no longer in free-fall as the Bank says it has "firmed". First quarter GDP growth was stronger than expected-something the Bank attributes to temporary factors-but is expected to dip a bit in the second quarter.

While all these economic factors combined aren't exactly great news, the Bank believes the economic stimulus reflected in the March Federal Budget will ultimately have a positive impact on GDP. This, combined with the fact that inflation is still below the 2% target, led the Bank to keep interest rates steady.

As always, if you have any questions about your variable rate mortgage-or any mortgage questions in general-feel free to contact me! I'd love to chat.


Buy a House in Calgary Now
Average List Price: $574,961
Active Listings: 16,195
Recently Sold Properties:  1,823
5 year fixed Annual income required:$90,330.74
5 year variable Annual income required:$108,619.95
Based on 5% down.  O.A.C.  For Information purposes only.  
**To see what you qualify for contact me**

Buy a House in Airdrie Now
Average List Price: $413,032
Active Listings: 1,141
Recently Sold Properties:  260
5 year fixed Annual income required:$65,800.36
5 year variable Annual income required:$78,939.69
Based on 5% down.  O.A.C.  For Information purposes only.  
**To see what you qualify for contact me**