Lots of exciting (ok – boring unless you like this stuff, like we do) news about the Bank of Canada rate (non) announcement today, along with reaction, speculation, and forecasting.
What does all of this mean? Well, for the moment, it’s great news for Canadians with adjustable rate mortgages because your mortgages are going to be cheap for awhile.
It’s also good news for people in fixed rate mortgages because bond yields aren’t likely to increase too much in light of the update from the Bank of Canada.
On the downside, it still indicates that there’s some weakness in our economy and that we’re potentially vulnerable to setbacks when it comes to jobs, exports, home starts, debt defaults, mortgage defaults, and other economic indicators. That’s why the Bank of Canada is unwilling at this time to raise rates.
Personally, we’ve been pretty thankful for the low mortgage rates we’ve had over the past year because it’s given people a bit of an incentive to get back into the market – especially first time buyers who thought they were going to miss out forever. It’s also been a good excuse for some people to refinance and get out of higher rates – even if they were just able to break even. The added long-term security of a great rate can’t be underestimated.
Now that the Christmas holiday season is upon us there may be a good opportunity to consider refinancing your mortgage to consolidate some debt. After all, why pay 10-18% on credit cards when you can borrow at 2-4%?