Bank of Canada Moves Rate Up by Quarter Point

By Brian Madigan LL.B.

(Ontario Real Estate Source)

The Bank of Canada hiked its key interest rate by a quarter point, 20 July 2010. A similar increase took place in June.

The Bank noted that it “expects the economic recovery in Canada to be more gradual than it had projected in…April, with growth of 3.5 per cent in 2010, 2.9 per cent in 2011, and 2.2 per cent in 2012. This revision reflects a slightly weaker profile for global economic growth and more modest consumption growth in Canada.”

Financial institutions will likely respond by increasing their prime lending rates by a quarter point. Lending institutions have different policies as to the timing of rate adjustments for variable-rate mortgages.

Fixed-rate mortgages are largely based on movements in the bond market. So, this announced increase will not likely have much impact.

This is not really a surprise. This increase was quite expected and has already been factored into the market.

Brian Madigan LL.B., Broker is an author and commentator on real estate matters, if you are interested in residential or commercial properties in Mississauga, Toronto or the GTA, you may contact him through Royal LePage Innovators Realty, Brokerage 905-796-8888
www.OntarioRealEstateSource.com