Lending Rates Hold at Historically Low Levels. Mortgage and Consumer Lending Stays Cheap Money, Could go Even Lower.

Mortgage and lending rates should remain relatively steady over the short-term as Bank of Canada governor Mark Carney decided to hold the benchmark lending rate at 1 percent today. Borrowing costs should remain low, hopefully spurring the purchase of more housing and other big ticket items like cars by Canadians. This is good news for anyone shopping for a home or investment property soon, and anyone who has existing variable rate debt. 


In the Globe and Mail today, Mark Carney is cited as saying:

“In light of slowing global economic momentum and heightened financial uncertainty, the need to withdraw monetary policy stimulus has diminished.”

“The Bank will continue to monitor carefully economic and financial developments in the Canadian and global economies, together with the evolution of risks, and set monetary policy consistent with achieving the 2-per-cent inflation target over the medium term.’’


In layman's terms, the global economy is doing worse than expected, and trouble in Europe and the United States is forcing Canada to keep stoking its economy to encourage domestic spending and consumption.


Most importantly, the door has now been left open for the Bank of Canada to actually cut interest rates going forward instead of raise them... money is cheap and in Canada it might just get even cheaper : )


Please post or e-mail me your comments and questions.
Matthew J.W. Clarke.