Once again everyone with a Variable Rate mortgage and line of credit can breath a sigh of relief! Yes, the Bank of Canada keeps the Key Lending rate unchanged. The Bank of Canada’s 1% means a Prime Rate of 3% for us consumers.
Still wondering where Prime is headed? Well you must realize that 1% is incredibly low. In order to stimulate the economy during the recession the rate hit rock bottom and was raised in September to 1%. How much longer it will stay there will depend on many things. The Bank looks at the economy here in Canada and globally. Things like inflation, employment, exports and our dollar impact it’s decision.
While we didn’t expect a rate hike now most economist project one early as May or as late as the end of the year. We will know more at the next meeting when the Bank of Canada’s governing board is expected to send a clearer signal on April 13, when it next issues its quarterly outlook for Canada and the world.