The Bank of Canada announced this morning that they will be maintaining their overnight rate, which means there is no increase to prime rate. This announcement came this morning, March 06th at 10am EST. This was not surprising and is exactly what was expected. The BOC has had their finger on the trigger to increase rates further, however, the slowing economy has led them to put the brakes on. When they started their rate increasing rampage back in July 2017, they stated that our economy was operating at maximum capacity, so the rate increases were needed in order to keep inflationary pressure under control.  However, that outlook has since changed.

In most cases, the Bank of Canada scheduled rate announcements affect prime rate only, which in turn affects variable rate mortgages and HELOCs (Home Equity Line of Credit). They do not have a direct impact on fixed mortgage rates.  Prime can move in either direction, while fixed rates remain stable.  There are exceptions, however.  Given the global and domestic economic slowdowns were more prominent than expected, we will likely see downward pressure on bond yields, which are the key influencer in pricing fixed mortgage rates.

Fixed rates were artificially high at the end of 2018, however, they have been falling since the start of the year. As bond yields continue to fall, so will fixed mortgage rates. I would expect to see mortgage rates below 3% by this spring. Of course. As far as prime rate? I would not expect to see any increases anytime soon, making variable rate mortgages great choices at the moment.

You can follow the bond yields yourself here. 
You can read about the announcement here. 

Currently, there are 5 year fixed rates available for as low as 3.24% – 3.54%, depending on your exact situation. Variable rate mortgages range from prime -1.20% to prime -0.75% (2.75% – 3.20%).

The next scheduled interest rate announcement from the Bank of Canada will be on April 24, 2019.

 

Paul Meredith is the author of the Amazon #1 best selling book, Beat the Bank – How to Win The Mortgage Game in Canada, and has ranked as one of the top 75 mortgage brokers in Canada since 2016. He was a finalist for Mortgage Broker of the Year in 2018, and can be seen as the exclusive mortgage broker on season two of TV’s Top Million Dollar Agent.