Date Posted: April 12, 2017
Great news for variable rate mortgage holders - your lender's prime rate isn't likely to climb due to the Bank of Canada's recent announcement that it will hold its key interest rate at 0.5 per cent. The overnight rate changes the cost of lending/borrowing short-term funds, which influences the Prime Rate financial institutions base your variable rate on.
After announcing it won't adjust its rate, currently at 0.5 per cent, the central bank disclosed it also considered significant uncertainties still weighing on its outlook, including the potentially adverse impacts of the U.S. economic agenda.
With the country's growth exceeding the bank's expectations, it has now adjusted its annual rate percentage for gross domestic product, climbing to 2.6 per cent for 2017, up from their earlier prediction of 2.1 per cent back in January, 2017.
The adjustment comes thanks to the unexpectedly robust residential investment, resumption of expenditures in the energy sector and an increase in consumer-spending due to bigger child-benefit cheques.
Despite the good news, there are still areas of concerns for the central bank, with an uncertain export growth and signs of weakness in areas such as business investment and employment.
Governor Poloz has seemingly taken a conservative approach during his time as Governor of the Bank of Canada. Unwilling to come out and confirm whether he believes Canada's economic growth is back to a predictable level.