The Bank of Canada has maintained overnight rates. This means the bank’s prime rate will remain at 2.85%.
Some key highlights in the Bank of Canada’s release are:
- Total CPI inflation in Canada has fallen as expected due to the drop in oil prices.
- Lower Canadian dollar is boosting core inflation as it remains close to 2%
- Canadian economic growth in the fourth quarter in 2014 was consistent with the Bank’s expectations.
- Most of the negative impact from the lower oil prices will appear in the first half of 2015 although it may be even more front loaded than projected in January
- Financial conditions in Canada have eased since January in response to the Bank’s cutting rates as well as global financial developments. These conditions will mitigate negative effects of oil price shock.
- The risks around inflation are now more balanced and they believe the current overnight rates are appropriate at this time
If you are in a Variable rate mortgage with a discount of less than Prime -.4% (currently 2.35%) you should be looking at refinancing this mortgage to get into a lower rate. If you have some consumer debt (credit cards, line of credits, loans,) or you have some reno’s you have been wanting to do, etc. now is a great time to review your mortgage.
If you’re of the mindset that interest rates, fixed or variable, are going to be increasing over the coming months or years and want to be proactive in managing this we can help you with a great strategy!