The Bank of Canada maintained its target for the overnight rate at 1.75%, it announced Wednesday.
The BoC said Canadian economic data is in line with projections set out in its April Monetary Policy Report, which forecasted an economic pickup in Q2 following a slowdown in late 2018 and early 2019.
“The Bank continues to monitor the Canadian energy and housing sectors closely, and has been pleased with a recent uptick in oil prices and a stabilizing housing environment, respectively,” James Laird, president of CanWise Financial, said.
However, the Bank remains concerned with global trade conflicts and a build-up of export inventory.
“The Bank’s language indicates that things will need to change to the positive or negative in order to move from their current rate strategy,” Laird said. “Therefore, Canadians can expect a stable rate environment for the foreseeable future.”
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So, what does this mean for mortgage rates?
“This announcement should bring peace of mind to consumers currently in a variable rate mortgage, because it is unlikely that the prime rate will increase anytime soon,” Laird said. “Going forward, a decrease seems as likely as an increase, which is also good news if you’re in a variable rate.
“Anyone shopping for a home can take comfort in the knowledge that the fixed rate environment is stable so, when you make a purchase, you can expect rates similar to those being offered today. This should be particularly helpful for households trying to budget for what the carrying cost of their mortgage will be.”
A good tool to use, when trying to determine your household budget, is a mortgage payment calculator.