Prime Interest Rate Remains the Same!

Posted by Joe Samson & Associates on Tuesday, April 20th, 2010 at 3:03pm.

bank_home_250_01 The Bank of Canada announced today that it will hold its rate at 1/2 percent. Banks therefore are expected to keep their prime rates at 2.25%.

The Bank of Canada says that the global recovery is proceeding stronger than projected. This fact is recognized to be largely due to ongoing stimulus packages that are expected to end later this year. Despite the progress to recovery, they mention the durability of the recovery over the long term is uncertain.

The Bank of Canada mentions our domestic demand in Canada is good which has fueled our recovery here. While they have positive growth on the books, the removal of the stimulus packages, the near parity of the Canadian dollar to the US and the absolute low level of US demand are quoted as severe drags on our Canadian economy.

The Bank of Canada has softened on their stance that they will hold the current rate until the end of the second quarter 2010. In their words, "with recent improvements in the economic outlook, the need for such extraordinary policy is now passing...". It is generally accepted that the two options were to hold until July and raise rates by a half percent or raise by a quarter percent one announcement early and another quarter in July.

To Your Real Estate Success!

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2 Responses to "Prime Interest Rate Remains the Same!"

Mario wrote:
It's May 7th and the US dollar is now a little stronger than the Canadian dollar (1.04 CAD for 1 USD) and the rate will probably keep getting lower as the summer time arrives

Posted on Friday, May 7th, 2010 at 1:09pm.

Mario wrote:
Completing the last comment: With the CAD getting weaker, this could mean that the prime interest rate could really change for August, more than .5%. This basically means that everyone should start investing in homes now, before the mortgage goes up dramatically. And get it in a fixed term of course. Some experts predict that by 2012 the mortgage is going to go up to 6.25%

Posted on Friday, May 7th, 2010 at 1:17pm.

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Last updated on: 2012-05-17 00:22:34