This mornings interest rate announcement.... a disappointment?

There have been predictions that the prime rate will drop again before spring, however it looks like we'll have to wait a little longer to see if another cut actually comes to fruition. The Bank of Canada announced this morning that they will be maintaining their overnight rate, which is the rate prime is based on. The announcement came at 10am this morning. (March 9, 2016). There has been much speculation that there would be a cut this time around with many economists predicting a 50/50 chance. I interpret that as them telling us that our guess is as good as theirs!

There is still a chance that we will see a decrease to prime before the spring time, although I would say chances of this are dwindling. One of the reasons for their decision this morning is due to their expectations that global growth will continue throughout the year and into the next. 

For now, the prime rate remains 2.70%. 

While the discounts off prime have been shrinking since late summer, you can still get a variable rate as low as prime -0.60%.

Prime rate and fixed mortgage rates are unrelated. While variable rate mortgages and lines of credit are affected by prime rate, fixed mortgage rates are determined by bond yields which have declined steeply since the beginning of the year.

5 year fixed mortgages have now fallen as low as 2.39%

You can read about the announcement here:  http://www.bankofcanada.ca/2016/03/f...se-2016-03-09/

The next interest rate announcement will be on April 13th, 2016