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The Bank of Canada has opted to give variable rate holders another gift – just in time for the holidays. The Bank announced today that it will be keep its target for the overnight rate the same at 1%. This means your mortgage rate will stay the same, too.
The Bank listed many reasons for its decision, including:
- Global uncertainty. Europe’s debt crisis has caused conditions in many global financial markets to deteriorate, and the Bank is predicting a European recession that will be more pronounced than previously anticipated.
- U.S. economic growth. While the U.S. recently revealed stronger-than-expected economic data, the country’s recovery is still fragile, and the European economic crisis is expected to weigh on it.
- Growth in China. While China, and other emerging economies, continue to be doing well, there are signs that this may start to moderate to a more sustainable pace due to weaker demand and policy tightening.
- Canada’s economic and GDP growth. While things are going well now, the weak global economic outlook is expected to affect Canada’s GDP growth, and the strength of the Canadian dollar will pose some challenges to the economy as a whole.
While it doesn’t look like the Bank is going to raise rates anytime soon, it’s never too early to get your affairs in order. If you feel an interest rate hike would deeply impact your household, give us a call to determine what options are available to you.
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