Surprise. Surprise. Bank of Canada Holds the rate at 1/2 percent.
Despite the ever-present predictions of another cut to prime rate this morning, the overnight rate remains unchanged. The prime rate remains 2.70%.
There has not been an increase to prime rate since September 2010 which is the longest streak in history. Economists have been predicting that the prime rate will remain unchanged until sometime in 2016 and some even longer than that. I’ve heard predictions as long as 5 years. However… they have been predicting the prime rate will increase ‘next year’ every year for the past 5 years now.
With variable rate mortgages as low as prime -0.75% (1.95%), variable is a popular option once again.
Prime rate and fixed mortgage rates are unrelated. While variable rate mortgages and lines of credit are affected by prime rate, fixed mortgage rates are determined by bond yields which have declined steeply since the beginning of the year.
5 year fixed mortgage rates have now dropped to as low as 2.44%.
With mortgage rates at such ridiculously low levels, now may also be a great time to consolidate any higher interest debt into your mortgage to take advantage of such low rates and lowering your overall monthly payment and amount of interest you are paying significantly.
Full story here: http://www.bankofcanada.ca/2015/10/fad-press-release-2015-10-21/