Interest Rates to stay the same!
On Tuesday the Bank of Canada announced that they would not be adjusting their prime lending rate and that the prime lending rate would remain at 3%. This will have a direct impact on any variable rate mortgage(s), secured line(s) of credit, or personal line(s) of credit that you may have.
The Bank of Canada feels that the global recovery is proceeding largely as expected, although risks have increased. In Europe, recent data have been consistent with a modest recovery. At the same time, there is an increased risk that sovereign debt concerns in several countries could trigger renewed strains in global financial markets.
The recovery in Canada is proceeding at a moderate pace, although economic activity in the second half of 2010 appears slightly weaker than the Bank projected in it's October Monetary Policy Report. Inflation is in line with the Bank's expectations and as a result, the Prime Lending rate has been left unchanged.
With rates staying low, we are continuing to recommend that clients stay in their variable rate mortgages. Many analysts have now said that they believe the interest rate hikes are now on hold until at least spring and maybe as long as late 2011. Please call us if you have any questions, or if you would like to discuss your best option.
The date of the Bank of Canada's next announcement is scheduled for 18 January 2011.