The next Bank of Canada interest rate announcement date is 2 weeks from today with zero chance of a rate change. In fact, there’s very little chance of a variable mortgage rate change for the next 12 months.
Just earlier this year Mark Carney was hinting at possible variable mortgage rate increases sometime this fall, but recent global economic events have reduced that likelihood to near zero. Dismal growth prospects from Europe, China and the US will likely put a drag on the Canadian economy meaning that the current ultra-low interest rate environment is still needed to maintain our growing but fragile economy.
Last months’s abrupt announcement by the Department of Finance sealed the deal as far as low mortgage rates go. Any existing upward rate pressure has now evaporated. In fact, if the dampening effect of the new mortgage rules is more pronounced than Mr. Flaherty predicts then we may be in need of some additional emergency measures from the Bank of Canada. Now, even a small variable mortgage rate decrease seems possible.
This is good news for existing variable mortgage rate holders especially if you locked in at prime less 0.75% or better. Hang onto that rate and enjoy the ride.