Mortgage Blog - Bank of Canada

Bank of Canada Decides to Increase Interest Rates

July 20, 2010 by Dania Spillett

The Bank of Canada announced this morning that they have raised the overnight rate a quarter point to 0.75%. The central bank rate is the one that the Big 5 banks use to set their prime rate as well as their variable mortgage rates. Mortgages not linked to the prime rate (fixed interest rate) will be unaffected as they are determined more by the fluctuations in the bond market. Because the Bank of Canada’s announcement was more cautious (due to the continued global instability), bond yields have dropped since the central bank’s announcement, which means good news ...

Bank of Canada to Increase Interest Rate Again?

July 15, 2010 by Dania Spillett

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 ...

Bank of Canada Raises Interest Rate

June 1, 2010 by Dania Spillett

The Bank of Canada released a statement this morning announcing the first interest rate increase in three years which makes it the first of the G-7 countries to raise it’s rates since the financial crisis. The central bank increased the overnight rate to 0.5% from the emergency low of 0.25%. The market felt the effects of the rate hike as the Canadian dollar fell against the US dollar and bond yields dropped this morning.

Today’s rate change will likely lead to an increase in prime rates offered by banks and lenders. As suggested in the article ...

Bank of Canada Rate Announcement Tomorrow

May 31, 2010 by Dania Spillett

Since the month of May is coming to an end, here is an update on the Bank of Canada’s interest rate decision set for tomorrow, June 1, 2010.

Both the Globe and Mail and RBC Financial, as well as CTV News, are talking about the 6.1% expansion in the Canadian economy within the last quarter. This expansion is also followed by a 4.9% increase during the final quarter of 2009. In addition, the Canadian gross domestic product has expanded for seven months in a row and has been increasing at the fastest pace since 1999. It seems ...

Bank of Canada - No Change Today

April 20, 2010 by Gordon McCallum

The Bank of Canada left it’s overnight rate at .25% today but signaled that the days of record-low interest rates are soon over.

“With recent improvements in the economic outlook, the need for such extraordinary policy is now passing, and it is appropriate to begin to lessen the degree of monetary stimulus,” the central bank said in its statement. “The extent and timing will depend on the outlook for economic activity and inflation, and will be consistent with achieving the 2% inflation target.”

Why the Bank of Canada Didn't Raise Rates Today

March 2, 2010 by Gordon McCallum

No surprise this morning from the Bank of Canada, which I had earlier predicted.

The main reasons cited for not increasing rates are:

1. Risks of inflation are “roughly balanced”.
2. The high Canadian dollar and soft demand from the U.S. are slowing down economic growth in Canada (despite a very strong 5% growth in GDP in Q4 last year)
3. They’re waiting until July just like they said they would.
4. It’s still too soon. If the BoC raises rates before July then it’s possible people and markets will overreact. I think stability and predictability ...

Why the Bank of Canada Won't Raise Rates Tomorrow

March 1, 2010 by Gordon McCallum

Mirror, mirror, on the wall! Who’s got the clearest crystal ball?

(I doubt it’s me, but here goes)

The Bank of Canada is not going to raise rates tomorrow. Not just because I say so. Or because the Financial Post says so , but for a few other key reasons:

1. The Bank of Canada said they wouldn’t

2. Our economy is recovering, but emotionally we’re far too scarred from the recession to handle a nasty surprise.

3. Canadian Bond Yields, which are market driven, haven’t gone up in anticipation of a move. They always go ...

Bank of Canada Rate Likely to Remain Unchanged

January 17, 2010 by Gordon McCallum

Most analysts are predicting that the Bank of Canada’s announcement tomorrow, Tuesday January 19th, 2010, will signal that things are improving but reiterate it’s previous commitment to keeping the overnight rate at it’s current .25%.

iMarketnews.com has a story about the Bank of Canada’s likely decision that includes some very interesting quotes, such as:

- Inevitably, the Bank will start to increase its rate, but not soon, most believe. That likely will happen “sometime this year,” says Eric Lascelles, chief rates strategist for TED Securities. However, he adds, “it is simply premature for the fireworks to ...

Bank of Canada December Announcement

December 7, 2009 by Gordon McCallum

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.

Bank of Canada keeps rates at .25%

Analyst Reactions to Bank of Canada December Announcement

Canadian Economy Recovering Just Fine

No need to panic about interest and mortgage rates going up – yet

Low interest rates until 2015? Only with tax increases – Dodge

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 ...

Bank of Canada Leaves Rates at .25%

October 19, 2009 by Gordon McCallum

in light of the strong Canadian Dollar and less inflationary pressure (at the moment), the Bank of Canada re-affirmed it’s decision to keep the benchmark overnight interest rate at .25% today.

Holders of variable and adjustable rate mortgages rejoice! There will be no rate increases for you at the moment.

I would suspect that this may also lead to a short term drop in bond yields and a reduction in current pricing on fixed-rate mortgages…but this remains to be seen.

If you’re polishing your crystal ball to see where rates are going to go, keep these rules ...

No Guarantee With Bank of Canada Guarantees

October 15, 2009 by Gordon McCallum

Remember back in April when the Bank of Canada dropped it’s overnight rate to .25% and guaranteed they wouldn’t raise rates until June of 2010? Remember? They said “Scout’s Honour!”

The search engines remember. Here’s our post from April

Since we all have short memories and things change, I guess a guarantee isn’t worth what it used to be. The best way to describe something like this is “It won’t change…until it changes!”

Check out the latest from the Financial Post (ok it’s two weeks old…sue me) with an article on ...

Bank of Canada Cuts Rate to 0.25%

April 20, 2009 by First Foundation

In a widely anticipated move the Bank of Canada further reduced it’s overnight lending rate to 0.25% – the lowest in Canadian history.

The more unexpected part of the announcement was the proclamation from the Bank of Canada that it would leave the overnight rate at this level until June of 2010. WOW. That means you have at least a year of lower variable and adjustable rates to enjoy before needing to lock-in.

Up until recently we have been strongly recommending fixed-rate mortgages to anyone that will listen (how can you lose at 3.69% for 5 years?) but ...

Bank of Canada Cuts Overnight Rate and Boris Bozic on BNN

March 3, 2009 by Shayla Damery

We have two interesting bits of information for you today. The first is the Bank of Canada’s recent interest rate announcement, and the second is the appearance of Merix Financial’s Founder and President on the Business News Network.

First, the Bank of Canada announced this morning, March 3rd, 2009, that it would be further decreasing the overnight lending rate by 0.5%, making the new rate 0.5%. While no changes have been made amongst our lenders yet, we can expect them to pass at least part of the 0.5% rate cut on to their prime rates ...

Bank of Canada Rate at All Time Low

January 20, 2009 by Gordon McCallum

History has been made today with the Bank of Canada lowering it's overnight lending rate to 1% - the lowest it has ever been.

Bank Prime rates have already been adjusted to 3% flat which means that we have adjustable / variable rate mortgages at 3.6% and HELOCs at 4% flat.

As many of you who follow this site know, fixed rates have also been coming down consistently over the past couple of months and I would expect that trend to continue for awhile yet. That said, this may be the best time to consider "locking in" a variable or ...

Bank of Canada Slashes Rates

December 9, 2008 by Gordon McCallum

If there's been a lesson I've learned in the last few months it's to "Expect the unexpected!". In tune with the recent sharp and drastic turns in our economy, our industry, and in policy, the Bank of Canada announced this morning that it has aggressively cut it's overnight lending rate by seventy-five basis points to 1.5%. This cut today puts the overnight rate at it's lowest point in 50 years.

All of this is good news for consumers and for retailers, I would suspect. It's also very good for home buyers and sellers ...

Bank of Canada Cuts Rates Again

October 21, 2008 by Shayla Damery

This morning, October 21^st, was the Bank of Canada's (BoC) regular interest rate announcement. The BoC has decided to drop rates again, this time by a quarter of a percent. That puts the Bank of Canada's overnight lending rate at 2.25%.

The main motivations behind the rate decrease are the current strains in the financial sector, the mild recession in the world economy, and the sharp declines in commodity prices (ie: oil is no longer $150 a barrel...something you may see reflected in gas prices). The Bank of Canada expects growth to continue to be ...

Bank of Canada Leaves Rate Alone Again

July 16, 2008 by Shayla Damery

On Tuesday, July 15^th, 2008, the Bank of Canada (BoC) made its interest rate announcement for the month of July. After the last interest rate announcement, and the BoC's decision to keep the rate unchanged, there wasn't as much speculation as to which way the bank would go. Once again, the Bank of Canada decided to keep the overnight lending rate at 3%. This means that lenders' prime lending rates should remain stable at 4.75%.

Key factors contributing to the BoC's decision to leave the overnight rate as is include the US economy's potential ...

Bank of Canada Lowers Overnight Rate Drastically

March 4, 2008 by Shayla Damery

Today, March 4^th, 2008, the Bank of Canada once again lowered its overnight lending rate, but this time they lowered it by a whopping 0.5%. The new overnight rate is now 3.5%.

Although demand for goods within Canada has remained strong (due to high commodity prices and strong employment), foreign demand for Canadian goods has decreased, largely due to the slowing economy of the United States and the appreciation of the Canadian dollar. Because the American economy is expected to slow even more, this could have adverse effects on Canada. As a result, the Bank of Canada ...

Bank of Canada's Overnight Rate Lowered Again

January 22, 2008 by Shayla Damery

Today, January 22, the Bank of Canada made its scheduled interest rate announcement. The overnight lending rate has been lowered by 0.25%, so the rate is now 4.00%.

The main motivation behind this rate drop is the continuing strong Canadian economy.

As with the last time that the Bank of Canada lowered the overnight rate (December 4, 2007), it’s good news for ARM and variable rate mortgage holders, as there will likely be pressure on mortgage lenders to lower their prime lending rate (which is currently 6.00%).

The next Bank of Canada interest rate announcement will ...

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