Since First Foundation likes to keep all its clients informed about interest rate changes, it’s only warranted that we mention something about the the Bank of Canada’s July 20th decision. Within the last few weeks odds have become quite high that the Bank of Canada’s Governor, Mark Carney, will choose to increase the overnight rate a quarter percent to 0.75%.
Although Europe and the United States are still struggling to create growth after the financial crisis, Canada showed a staggering employment gain in June as the economy created six times more jobs than predicted. As well, housing starts and sales have continued to drop over the past month. These features, combined with the growing confidence businesses have in the domestic market, serve to encourage the Bank of Canada in their decision over raising the overnight interest rate.
Once the Bank’s overnight interest rate goes up, the Prime rate usually follows suit. This is information that can affect many mortgage holders. If are a mortgage holder with an adjustable interest rate, this information will affect the interest you are paying on the principal portion of your loan. If you have any questions about how the Bank of Canada’s impending announcement might affect you and your interest rates, feel free to contact one of our Mortgage Brokers and we will do our best to answer any questions you may have.