Eight times a year the Bank of Canada (BoC) meets to determine what the base lending interest rate should be. Any change to this rate influences rates such as Mortgages and other customer loans. It also is a good indicator for the current Canadian economy.
Today the Bank of Canada announced that they will keep the overnight lending interest rate at 0.75%; which will translate to 2.85% at your local bank.
The Canadian economy is estimated to have stalled in the first quarter of 2015. The Bank now expects global growth to strengthen and average 3 1/2 per cent per year over the course of 2015 to 2017. This is a result of many central banks easing monetary policies and the effect of lower commodity prices. The strong growth of United States is expected to resume in the second quarter of 2015 after a weak first quarter.
The Bank of Canada expects real Gross Domestic Product growth of 1.9 per cent in 2015, 2.5 per cent in 2016 and 2.0 per cent in 2017. As the economy reaches and remains at full capacity around the end of 2016, both total and core inflation are projected to be close to 2 per cent on a sustained basis. The Bank of Canada will meet again on May 27th, to which we will notify you of any updates.
If you have questions about your mortgage or what this means for you, please feel free to contact our office and speak to one of our Mortgage Brokers today.