The Bank of Canada’s overnight rate of 1.75% will remain unchanged as of the Bank’s announcement on December 5th.

After several past hikes, why is the Bank standing pat now? “The global economic expansion is moderating largely as expected,” they said, “but signs are emerging that trade conflicts are weighing more heavily on global demand… there are upside as well as downside risks around trade policy.” In a nutshell: they’re going to wait and see what happens.

The overnight rate is relevant to mortgage owners because it immediately impacts the PRIME rate, which is 3.95% today. When rates are low and don’t look like they’re going to change anytime soon, it’s a good time to look into a variable-rate mortgage.

Economists were certain when they predicted the Bank wouldn’t raise rates this month. And they’re certain they won’t be raising them in January either. “Looking ahead to January, the [Bank of Canada] will likely need to be convinced to hike (rather than not to hike), so we’ll need to see a solid run of data and oil prices at a minimum hanging in there,” said Scotiabank economist Derek Holt.

How long can we expect interest rates to remain as they are? Changes in the Bank’s rates are reliant on domestic and global economies. Brian DePratto, TD Bank Analyst, doesn’t think it’s likely we’ll see any changes. “We no longer expect the Bank of Canada to hike its policy interest rate in January,” he said. “Spring 2019 now appears to be the more likely timing, allowing for the Bank to ensure that the growth narrative is back on track.”

For more information on PRIME rate and your mortgage, please contact me, Josh, at 403-241-3255