The Bank of Canada did what everyone expected this week and left the overnight rate unchanged at 1%.  This marks the 14th straight month with no change in prime.

For those with variable rate mortgages, this means you get to enjoy your low rates a little longer and in all likelihood, well into 2013.

The general tone of the announcement changed from being hawkish to more cautious as a serious sovereign debt crisis continues to loom over Europe, potentially pushing the region back into recession.  These concerns, along with a domestic economy that underperformed the bank’s expectations in the first quarter will largely subdue the need for the more immediate removal of economic stimulus.

All this goes against what OSFI is hoping to hear as they are likely to announce their proposed changes for banks later this month.  This will increase the due diligence required to ensure that borrowers can afford their mortgage payments now, and a few years later when rates inevitably increase.  Not the news that borrowers and brokers alike want to hear.


Lee Welbanks is a Mortgage Broker with Welbanks Financial Group, Lee will be posting these informative “Market Minutes” each week for you to enjoy. Please remember to subscribe to the Spring Realty Insider list to receive new blog post notifications, featured properties and insider access to Toronto’s hottest new developments right to your inbox.