Bank of Canada Maintains Key Interest Rate

The Bank of Canada's strategy of keeping short-term interest rates steady continued with its announcement today that it would leave its key policy rate unchanged. This is the Bank's sixth consecutive decision since May 2006 to leave this rate constant.

In its announcement the Bank commented that it deems the risks to its previous inflation projections to be roughly balanced, with the main downside risk continuing to be "that growth in the U.S. economy could be lower than expected," and the main upside risk continuing to be "that household spending in Canada could be stronger than expected, largely because of borrowing against increased home equity."

This decision means that the prime lending rate offered by most lending institutions in Canada will stay put, as will rates on variable mortgages. The Bank’s decision today does not affect the rates for new fixed mortgages, the pricing of which is determined by trading in the Canadian bond markets.

If you would like to discuss how current trends in mortgage rates impact the best mortgage strategy for you, contact an Invis Mortgage Consultant. He or she can obtain a mortgage pre-approval if you're wanting to buy a home – with a "rate hold" of up to 120 days, you will know how much you can afford. Another starting point is the www.invis.ca website, where you will find a number of calculators that allow mortgage holders and prospective home buyers to examine different financing scenarios in more detail.

Courtesy of Jim Rawson of Invis, 416-972-6336 ex. 30