Thursday, July 18, 2013

Prime rate stays the same...




The new Governor of the Bank of Canada, Stephen Poloz, maintained the status quo set by his predecessor, Mark Carney, by leaving the prime lending rate unchanged in the interest rate announcement yesterday. Poloz also inferred that he doesn't see the prime lending rate moving anytime soon as Canada's economy is still "choppy in the near term".
This latest announcement by Canada's central bank is good news for borrowers looking for a low cost alternative to the 5 year fixed mortgage since rates rose a few weeks ago. With variable rate mortgages at prime less 0.40% it is a low cost option when compared to the current five year fixed mortgage. However, variable rate mortgages are more difficult to qualify for than the five year fixed mortgage so it's best to ask your mortgage broker if this particular product would work for your individual situation.