The Bank of Canada announced yesterday that they will maintain the overnight rate at 1%. This ultimately will keep variable mortgage rates where they are at least until the next meeting date, scheduled for September 5th. This announcement was uniformly expected by economists and mortgage planners alike.
In the announcement Mark Carney downgraded the Banks’ growth prediction for the Canadian economy down to 2.1% for 2012 and 2.3% for 2013. These slower growth numbers suggest that variable mortgage rates will continue at their current lows well into next year.
For variable mortgage rate holders this is a further sign to hold steady. Although it’s tempting to lock into current record low fixed mortgage rates, the security provided by the higher fixed mortgage rate is not worth paying an extra 0.75% to 1% for what now looks to be at least another year.