Variable Mortgage Rate Forecast – May 2013

Bank of Canada Stands Pat

Mark Carney’s last rate announcement came and went without much fanfare.  Variable mortgage rates will remain the same at least until the next announcement date on July 17th, 2013 and likely well into the latter half of 2014.

The Bank of Canada’s language hasn’t changed much from its previous interest rate announcement stating that low rates “will likely remain appropriate for a period of time, after which some modest withdrawal will likely be required, consistent with achieving the 2 per cent inflation target.”

Economists are united in their predictions which can be summed up by comments from Dawn Desjardins, RBC economist “Our view remains that the bank (Bank of Canada) is likely to remain on hold until the second half of 2014.”

Bottom line is that it’s still steady as she goes for those of you holding variable rate mortgages, especially if you have a significant discount from prime.  If you are renegotiating your mortgage, however, then a variable rate mortgage may not be your best option because of the limited discounting now available.

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