Interest Rate Forecast
BMO economics released a report last week stating they believe the Bank of Canada will maintain the key interest rate at 1 per cent until the fall of 2013, pushing their previous prediction of July 2013 back a few months.
“We now expect the Bank of Canada to remain on hold deep into 2013, even as they continue to signal that the next move in rates is still likely to be higher than lower” – Douglas Porter, BMO economist
BMO’s forecast implies that variable mortgage rates will likely stay in this ultra-low environment for at least one year. Currently, 5-year variable rates are available for as low as 2.65 per cent, or Prime – 0.35.
Mortgage Rate Recap
There wasn’t much action from last week, as the only major move was from BMO, who lowered their 5-year fixed rate from 3.29 per cent, down to 3.09 per cent. However, out of all the major banks in Canada, BMO now has the lowest advertised 5-year fixed rate, ahead of ING Direct (3.19 per cent) by ten basis points.
|Rate Type||Previous Rate||Current Rate||Change in Basis Points (bps)|
|5-year Fixed||3.29%||3.09%||Decrease of 20 bps|
Where are Canada Mortgage Rates this week?
Canadian Mortgage Rates in 2012
The average discounted mortgage rate in Canada for 2012:
Note: This is simply a small sample size and does not represent the entire market. It does, however, offer some useful insight.