Great news for prospective homebuyers! Bank of Canada Governor Mark Carney has decided to hold the key policy rate at 1.0% for now, and indicated that it will remain there for longer than originally expected.
The benchmark overnight rate is the rate that the Bank of Canada sets for financial institutions for one day loans amongst themselves. This rate directly influences other rates, including those for mortgages.
Reasons cited for the hold include an expectation for inflation to remain low, and continued 'slack' in the Canadian economy, with growth projected at 1.5% for 2013. Keeping rates low encourages spending, and thus helps trigger economic growth.
The next scheduled release for the overnight rate annoucement is May 29, 2013. If you are considering purchasing a home in the near future, and would like to discuss how much you can afford, give me a call at 905.434.0067 anytime.