No Bank of Canada rate change

The Bank of Canada announced that it is maintaining its target for the overnight rate at 1 per cent. As a result, the prime rate will remain at 3.00%, much to the benefit of variable rate mortgage holders.



In a press release, the Bank of Canada gave the following reasons as to why they took another pass on a rate hike this time around:



"The outlook for the global economy has deteriorated (since October)."
"...very favourable financing conditions are expected to buttress consumer spending and housing activity."
"...the ratio of household debt to income is projected to rise further."
"The economy is only anticipated to return to full capacity by the third quarter of 2013, one quarter earlier than was expected in October."
"With the target interest rate near historic lows and the financial system functioning well, there is considerable monetary policy stimulus in Canada."



The next Bank of Canada rate meeting is March 8, 2012. It is expected to continue with no rate change at this meeting too.
What does this mean for you , the average consumer? If you have a variable rate mortgage or a line of credit, your interest rate will remain the same at least until March 8th. If you have a fixed rate mortgage, this announcement does not affect you at all.
By the way, if you have an unsecured line of credit you are probably paying about 6% now. If you own a home, you can get a line of credit secured against your home and pay about 3.50%. This can be a considerable saving. Contact me for more information on how you can save money.