The Bank of Canada kept its overnight rate steady at 1.75% this morning after speculation that it might raise the rate by 0.25% again. The rate has previously been increased by 0.25% five times since 2017 in an attempt to keep inflation in an acceptable range. The last rate increase was in October 2018.
The overnight rate is set by the Bank of Canada and it is the rate other banks use to lend one-day funds among themselves. This influences other rates such as consumer loans and mortgages. Keeping the rate unchanged means the current mortgages rates should hold steady for the time being.
Although the lending and mortgage rates should remain the same, other areas of the economy will be affected by the hold on rates. The bank downgraded its expectations for Canada’s economy in 2019 from 2.1% to 1.7% GDP growth. As far as real estate and mortgage rates go, fixed rates should stay the same and those who opted for a variable rate will enjoy a continued lower rate.