The Bank of Canada (BoC) incre ased its benchmark rate by 0.25% to 1% today. It&a mp;r squo;s the third consecutive increase for this year and would be the first time prime has seen 3% since February 2009. The prime rate is used in determine variable mortgage rates. With the BoC decision, retail banks are therefore expected to raise their prime rates to 3%.
For those clients in a variable rate mortgage with a 25 year amortization, they can expect to see an approximate $13 increase in their monthly mortgage payment (per $100K owing).
Bank of Canada governor Mark Carney suggested that the Canadian recovery would be ‘slightly more gradual’ than previous expected. The Canadian economy grew at approximately 2% short of the 3% the Bank of Canada predicted. This does not necessarily mean a rate pause at the next meeting, some economist consider 3.5% - 4.0% the ideal position the BoC would like to see the benchmark rate.
The next decision on the bank’s lending rate is October 19th.
No comments:
Post a Comment