Good news for home owners in variable or adjustable rate mortgages. The Bank of Canada announced yesterday that its overnight rate will remain unchanged for the time being. Canadian Banks have responded accordingly by leaving their Prime lending rates alone at 6.25%.
The article can be read at the CBC Website. The entire press release can be read below by clicking “read more”.
If you’re interested in a variable or adjustable rate mortgage you can read more about them here, or apply for one today!
FOR IMMEDIATE RELEASE|
5 September 2007
CONTACT: Jeremy Harrison|
Bank of Canada keeps target for the overnight rate at 4 1/2 per cent
Near-term prospects for economic growth outside North America appear to be slightly stronger than anticipated in the July Monetary Policy Report Update (MPRU), while near-term economic prospects for the United States are weaker than expected. It now seems likely that the adjustment in the U.S. residential housing sector will be more pronounced and protracted, exacerbated by recent developments in financial markets. On balance, this implies weaker demand for Canadian exports than had been expected at the time of the July MPRU.
Against this background, the Bank judges that the current level of the target for the overnight rate is appropriate. However, there are significant upside and downside risks to the outlook for inflation. On the upside, there is a possibility that household demand in Canada could be stronger than anticipated, while on the downside the ongoing adjustment in the U.S. housing sector could be more severe and spill over to the U.S. economy more broadly. In addition, there is uncertainty about the extent and duration of the tightening of credit conditions in Canada and, hence, about the tempering effect this will have on growth in domestic demand.
The Bank of Canada’s next scheduled date for announcing the overnight rate target is 16 October 2007.