The Bank of Canada announced today that interest rates are to remain low and steady with the prime rate at 3%.
In its statement, the Bank noted that it expects “growth in Canada will be slow through mid-2012 before picking up as the global economic environment improves, uncertainty dissipates and confidence increases.” The Bank also projected today that “the Canadian economy will expand by 2.1 per cent in 2011, 1.9 per cent in 2012, and 2.9 per cent in 2013.”
The prime rate at most lenders will stay at 3.00%, which means those with variable-rate mortgages will still enjoy relatively low rates. A new variable-rate mortgage can in many cases be obtained by qualified borrowers at Prime minus 0.20%, or 2.80% today. Home equity lines of credit and variable-rate credit cards are also typically linked to the prime rate.
The pricing for new fixed-rate mortgages is influenced by trends in the bond markets, rather than the central bank’s key policy rate.
The Bank’s next rate decision is scheduled for December 6, 2011.