As you know, your variable rate mortgage, line of credit and/or student loans are all based on the Prime Rate and here is your personal update from me on the recent Bank of Canada announcement on changes to their Overnight Rate which in most cases impacts your Prime Rate.
At 10:00 am EST, Wednesday June 4th, 2014 the Bank of Canada again did what we expected them to do … they continue to maintain their overnight rate. What this means to you is that once again the prime rate on your mortgage, line of credit or student loan will not change and remains at 3.00%. This is fabulous news but are you still making the most of the low payments you still have, as the rate will increase in the future. If you have any high interest credit card debt that you can’t pay off in full each month, it might be a good time for us to talk to see if we can save you some money.
Here is an excerpt of the announcement from the Bank of Canada and what they had to say about their decision today:
“Global economic growth in the first quarter was weaker than anticipated… The U.S. economy is rebounding after a pause in the first quarter, but there could be slightly less underlying momentum than previously expected. Globally, long-term bond yields have continued their decline, reflecting in part growing market anticipation that interest rates will remain low over the long term. The Canadian economy grew at a modest rate in the first quarter, held back by severe weather and supply constraints. The ingredients for a pickup in exports remain in place, including the lower Canadian dollar and an anticipated strengthening of foreign demand. Improved corporate profits, especially in exchange rate-sensitive sectors, should also support higher business investment in the coming quarters”
The Bank does not expect to increase their rate in the foreseeable future. They’re predicting they will stay the same until well into 2015!
Based on this recent announcement, and the anticipation that the prime rate will still remain low for a while now, However, if having a fixed payment is important to you, call me so I can calculate what your new payment would look like and also if it is suitable for you. The next announcement on any change to the prime rate is July 16th, 2014 at which time I’ll be in touch again.
Enjoy the sunshine!