Bank of Canada Interest Rate Announcement - May 29, 2013
At 10:00 am EST, Wednesday May 29th, 2013 the Bank of Canada again did what we expected them to do… they maintained their overnight rate. What this means to you if you have a floating / variable rate mortgage, line of credit or student loan is that your rate will not change and remains based on prime rate at 3.00%. This is great news as you still have a great low rate and so continue to make the most of the low payments you will still have. Don’t forget as always we recommend you chat with a financial adviser about a Tax Free Savings Account or some RRSP contributions to trigger a potential income tax refund next year as your payments continue to remain low! If you don’t have a financial adviser, let us know and we’d be happy to recommend one to you.
Here is an excerpt of the announcement from the Bank of Canada and what they had to say about their decision:
“In the United States, the economic expansion is progressing at a modest pace, with continued strengthening in private demand partly offset by fiscal consolidation. Japan’s economy is beginning to respond to significant policy stimulus. Europe, in contrast, remains in recession. Growth in China has continued to ease from very strong rates, weighing somewhat on global commodity prices.”
Based on this news and the continued slack in the Canadian economy and the muted outlook for inflation, the Bank does not expect to increase their rate in the foreseeable future with any change most likely to occur possibly as late as Fall 2013 to early 2014! Remember, that any increase to the prime rate since 1992 has only been by 0.25% at any ONE time, so you won’t see a large significant increase all at once.
Fixed rates haven’t changed much at all since the last announcement, at around 2.89% for a five year fixed term.
If you currently have a variable rate mortgage, we’d recommend that you either stay with your current variable rate product as your interest rate is likely lower than a fixed term rate right now, or consider locking into a low rate fixed to take advantage of the security and peace of mind. If having a fixed payment is important to you, call us so we can calculate what your new payment would look like and also if it is suitable for you. If you have a fixed rate mortgage and you would like to lower your monthly payment, reduce your amortization, switch lenders etc, we are here to help you.
Please call us and ask for your “free mortgage review”. Sometimes there are simple changes that can be made with no cost to you that will improve your financial situation. The next announcement on any change to the prime rate is July 17, 2013 at which time we’ll be in touch again. We would hope you and your family have a great summer, and we look forward to speaking with you again soon. Warm regards, Chana Fay Charach, AMP President VERICO Synergy Mortgage Inc. Office Tel: 604.269.9419 chana@synergymortgage.cawww.SynergyMortgage.caPS: We would like to ask you a favor – rates are still low right now and so it is a great time for refinancing, first time homebuyers or buying an investment property especially as we can hold rates for up to six months, if you know someone that is looking for advice on their mortgage options, with no obligation, would you mind passing our contact information on to them – Your referrals are the biggest compliment we can receive and are much appreciated. We also have some very attractive “Quick Close Rate Specials”. E. & O.E. © Copyright 2013 VERICO Synergy Mortgage Inc. | 
