Rate Watch: October 2017 Bank of Canada maintains overnight rate target at 1 per cent.
Cautious optimism is the best way to describe the Bank of Canada's latest take on the Canadian economy.
Optimism due to indicators that the Canadian economy is reaching it's full potential. Caution because of uncertainty relating to how a more protectionist U.S could dramatically impact Canadian exports to our largest trading partner
To read the full press release directly from the Bank of Canada click here.
"While less monetary policy stimulus (i.e. rate increases) will likely be required over time, governing council will be cautious in making future adjustments to the policy rate," the bank said in a statement.
The bank stressed it will pay particular attention to incoming data to assess the unfolding impact of higher interest rates, the evolution of economic capacity, wage growth and inflation.
What Does This Mean For My Mortgage & Loans?
After two straight increases the prime rate will not change this time round remaining at 3.20%.
If you are in a variable rate mortgage or line of credit your monthly payments will remain unchanged.
Is Now The Time To Lock-in?
The Bank of Canada has made it clear that it expects to increase the prime rate in the future however in the same sentence confide that they will be much more cautious and slower in their decisions.
There is no doubt that the future is higher rates.
However to determine whether now is the right time to convert to a fixed depends on your current effective rate, the rate being offered for conversion and timing to the maturity of your current mortgage.
What About Fixed Rate Mortgages?
Fixed rate mortgages are priced based on bond-yields and not directly affected by the prime rate or decisions by the Bank of Canada.
Next BoC Rate Announcement December 6th
We are committed to keeping you informed regarding important changes to the Canadian mortgage market that can effect your mortgage.
This Rate Watch is prepared 8 times annually following the Bank of Canada's regular rate announcements.
We're always just a phone call or email away. If you have any specific questions about your mortgage or whether converting to a fixed is right for you please don't hesitate to reach out.