School’s in for Bank of Canada

To all the kids…. including my son…..”Have a great year at school.. make it fun… make it count”.

Tomorrow is the 6th of 8 scheduled meetings for 2010 by the Bank of Canada…a time when they set the Target Rate or Overnight Rate, which directly affects the Bank Prime Rate and your Variable Rate Mortgage.

The original plan called for Mark Carney, Governor of Bank of Canada, to raise interest rates steadily over the next year or so by as much as 3.00%… but it’s become a little tougher to make that move.

Less than impressive economic news in the U.S., Canada and the rest of the world has given concern about a double dip recession…. raising the rates during a period of uncertainty is risky business.   Right now, experts are calling for a 60% chance of a rate hike but then a pause to see how this will affect the economy.

Longer term forecasts have been amended for more modest rate hikes in 2011….  all good news for Borrowers…  stay tuned as we continue to monitor the latest reports…

Bottom line, new Variable rate mortgages can be had for around 2.05% to 2.10%… so even a 1.50% increase would  beat out a 5 year fixed rate….