Your home is your
most important asset. This update from
Mortgage Dave will help you keep abreast of the latest news about financing
your home. Enjoy!
Well Summer is winding down and the kids are back in school so its time for the Bank of Canada to review the overnight lending rates once again. There were no surprises this morning as the Bank of Canada did not touch the overnight lending rate and they reaffirmed their promise not to move the rate until next summer.
The only wild card is the strength of the dollar as it may force movement to offset inflation. Most experts do not see any upward movement until early 2011. See the full article at
globe and mail article.
A recent report from CIBC World
Economics states that core inflation may not be effecting the promise of a low
prime rate by June 2010. The interest rate hikes to the prime rate may be
postponed unitl early 2011. So if you're riding a variable rate mortgage and
thinking about a time to lock in, you may have a little more time on your
hands.
Remember, the projections for
the prime rate are independant to the levels of the fixed interest rates. Even
if prime rate stays at 2.25%, we could still see some expected increases in the
short and long term fixed rates.
Here is a copy of the
article:
Inflation
no real threat to BoC's rate promise: CIBC report
Thursday, 27 August 2009
Core inflation won't
affect the 0.25 per cent interest rate the Bank of Canada said it would keep
until June 2010, a new report by CIBC World Markets forecasts.
"Look for
headline and core prices to cross paths in the second quarter of 2010 at a
level well under the Bank of Canada's two per cent target," wrote CIBC
economists Avery Shenfeld and Krishen Rangasamy in the report. "As a
result, Canada's inflation rate will be no threat to the Bank easily fulfilling
its pledge to keep interest rates at a slim quarter point through
mid-2010."
Shenfeld and Rangasamy
disagreed with the Central Bank's expectation of growth "above the
non-inflationary potential" next year, stating that the recession's
effects are likely to linger for some time, even as the U.S. stimulus spending
kicks in. Along with slow growth, the report also pointed to a negative
consumer price index and a stronger Canadian dollar as contributors to keeping
core inflation low.
"Indeed, if as we
expect, sluggish final demand keeps the economy on a tamer trajectory than the
Bank hopes, it will be able to defer the first hike until early 2011," the
report said.
Source: mortgageBrokerNews.ca
So for all of you in variable rate mortgages sit tight and enjoy the ride.
