Economists don’t expect the Bank of Canada to change its key lending rate

On July 15, the Bank of Canada will have its new rate meeting, and many experts don’t expect any changes this time.

Economists from a Finders.com panel have different opinions concerning the term of no changes state.

Almost half of the panelists expect the rate to remain unchanged for more than a year, while 40% of respondents see no changes until 2022. The poll showed that only 13.33% predict a rate change during the next 12 months.

As you know, the BoC has a historic example to follow, as following the 2008-2009 economic crisis, it raised the overnight rate twice in 2010. But the Bank realized it was a mistake, so it decided not to raise the rate again until 2015.

The possibility of a long-term rate hold is a ray of light for consumers amid all the current virus news.

“It’s good news for mortgage rates, particularly for the variable ones,” – noted one expert from the panel. “Variable rates will probably fall. There were times variable rates were at prime minus 1% or lower, and now they are about prime minus 0.6%”.

“During the previous 20 years, borrowers have almost always benefitted more from choosing variable-rate mortgages. However, in case you appreciate certainty, fixed rates could be also a good option, as they are near historic lows and it’s expected to stay that way for some time.”

With today’s extremely low rates, there’s not much space for more cuts. If your renewal time is coming, please, compare all the rates available and make sure you receive the best one. In case you have no problems with employment and your income hasn’t declined, there should be no difficulties with re-qualifying with a new bank.